From: Deanna Dean [sustentation@shaw.ca]
Sent: 18-May-04 8:41 AM
Subject: FW: Today's News for 17-May-2004

 

Good morning everyone - click on the hyperlink below to go the article in this document or go to www.earthweekvictoria.ca/news/2004may17_printbundle.htm to view on-line.

Article Titles…


Redressing B.C.'s democratic deficit Anderson takes on Victoria on election eve  |  Students give top marks to four-day school week  |  Island should focus its energy on energy  |  Anderson stands firm on offshore  |  Air Canada seeks last-gasp deal  |  Air Canada inching toward deal  |  Lake Ontario water used to cool buildings  |  Port an important local, provincial and national asset  |  Outlook for week keys on oil costs, consumer price index  |  BC Film makes it work as government funding dwindles  |  Falcon to speak at chamber lunch  |  Council will have plan in place when mayor begins campaign to win federal seat  |  GVRD asked to produce report card on city's balance of growth, livability  |  Martin wants MPs to have say in Supreme Court nominees  |  Liberal points finger at Chrétien’s office  |  Think price of gas is high now? Learn to live with it, say analysts  |  Healthiest jobs tend to be those that pay the most  |  Appointing candidates can cut both ways  |  Martin has given B.C. a team that can deliver  |  Democracy in Canada is but a sad memory B.C.'s aging population  |  The high cost of raising a family  |  Air Canada agrees with six unions in bid to save carrier  |  No election called yet, but candidates off and running  |  Designer calling on professional artists to boycott Olympic contest  |  In other words: Nine steps to top health care  |  It's time to give voters fixed federal election dates  |  United, municipalities will prosper; divided, they cannot survive  |  Charting a course over urban scrawl  |  Environmentalism key issue for new lobby group  |  Contempt, stupidity, or good old patronage? Forget crocodile tears - the West has reason to weep  |  Whistleblowers: why they do it  |  Alberta doubles spending on government advertising  |  Key aide gave direction in scandal, MP says  |  New national regulator topic of meeting  |  No merger guidelines for banks until fall: Goodale Mining sector powers jump in profits  |  Water tension rising between Canada and U.S.  |  New federal health agency to be located in Winnipeg Liberals slam Tories over proposed tax cuts  |  America's new war on drugs targets Canadian pharmacists  |  Moscow expected to ratify Kyoto pact: EU ministers Telus gives RBC a turn  |  In search of an oilpatch Liberal for Ottawa  |  OPEC under pressure on oil prices  |  PMO involved in sponsorship program, Liberal MP says Foreign journalists' tests of Athens security not welcomed by Olympic organizers  |  The saga of an agrarian plagiarist  |  Shrinking Ottawa  |  Ottawa errs in war crime study  |  Air Canada deal hinges on two holdout unions  |  Martin determined to let MPs screen judges  |  Ontario Grits want health pledges from federal parties  |  Canada's business schools get good grades  |  If Wal-Mart is worried, maybe we should be, too  |  B.C. Liberals face horse race with NDP next May  |  PM no closer to the truth

 

 

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Globe and Mail, Page A04, 17-May-2004

Redressing B.C.'s democratic deficit

By Hugh Winsor

VANCOUVER

The people who have been using strong-arm tactics to create Prime Minister Paul Martin's "dream team" of Liberal candidates in British Columbia have another definition of what constitutes the democratic deficit.

Their concept of the democratic deficit is that British Columbia has been losing out in the power game in Ottawa because of weak representation, in part because so few MPs were elected from the province during the Jean Chretien era, and in part because those who have been elected have been relatively ineffective.

So the Liberals' B.C. election organization, led by Vancouver public-relations consultant Mark Marrissen and Bill Cunningham, president of the B.C. wing of the Liberal Party of Canada, set about to fix it. Their approach has the full support of Mr. Martin, even if other notions of the democratic deficit involving autonomy at the constituency level or the sensibilities of existing Liberal MPs get in the way.

Mr. Marrissen is under particular pressure because he and Mr. Martin used the leader's prerogative of appointing a candidate directly to parachute Mr. Cunningham into the Burnaby-Douglas riding that is now deemed winnable for the Liberals because Svend Robinson has stepped out. The riding has a large Chinese population and two Chinese-Canadians have been campaigning for the Liberal nomination, selling several thousand memberships.

Mr. Cunningham also lives in the riding, however, and the Martin organization believes that as a long-time activist and party executive, he deserves an opportunity to run for Parliament. So, why didn't he get out and sell memberships like the other candidates? The realpolitik answer is the campaign organization believed no Caucasian would stand a chance against a Chinese candidate.

In many other B.C. ridings, the Liberal Party apparatus is effectively controlled by Indo-Canadians with close ties to Sikh temples. These linkages flourish because of group-voting practices often demonstrated by ethnic groups, and they create another form of democratic deficit, according to worried party officials. Indeed, these officials are proactively encouraging secular candidates from the Sikh community as differentiated from temple-sponsored candidates.

This in part explains Mr. Martin's direct nomination of former New Democrat B.C. premier Ujjal Dosanjh in former Chretien minister Herb Dhaliwal's riding, even though there were two other Sikh aspirants campaigning for the nomination. Another major factor in the Dosanjh candidacy has to do with the NDP, and more on that later.

Mr. Marrissen, B.C. campaign chair, argues democracy is served "if the candidate nominated [either by the leader or otherwise] is what the community wants on election day." Setting aside the "we know what is best for you" element in all of this, Mr. Martin and his B.C. advisers have assembled a powerhouse and widely representative team.

Low-key, two-term MP Sophia Leung, for instance, was "persuaded" to step aside in Vancouver-Kingsway for David Emerson, a shoo-in for a very senior cabinet position if he (and Mr. Martin) are elected. (Her reward will come after the election.) Mr. Emerson obtained his PhD in economics under the direction of Bank of Canada Governor David Dodge (when he was a professor at Queen's University in Kingston), has been a deputy minister in Victoria, a bank president in Alberta, built a $500-million addition as president of the Vancouver International Airport Authority, and has spent the past six years turning around forestry giant Canfor in the midst of the softwood-lumber dispute with the United States.

As he puts it, he was persuaded by Mr. Martin to be a Liberal candidate because he seeks out challenges. "I want a problem that is substantive, complex or intractable and some authority to run with it."

He could well be sitting in the next Liberal caucus beside Dave Haggard, the no-nonsense president of the Industrial, Wood and Allied Workers of Canada (IWA) with whom he has negotiated for years. Between them, they cover off both sides of B.C.'s largest industry. Mr. Haggard quit the NDP when Jack Layton won the leadership last year (he was too left and too much in the hands of the environmental groups for Mr. Haggard's liking.)

Another former NDPer, Shirley Chan, will represent the Liberals against New Democrat MP Libby Davies in Vancouver East. She has been a prominent activist in the Chinese community, chief of staff to Mike Harcourt when he was mayor of Vancouver, and recently Health Canada's director-general for British Columbia.

She has also chaired the board of governors of the University of British Columbia and will be a force to be reckoned with in the unlikely event she can beat Ms. Davies.

Rounding out the "dream team" is Miles Richardson, the charismatic leader of the Haida Gwaii, and a powerful advocate for first nations. Impressive as all the individuals are, the question is whether the tactics used to create this team diminished the democratic deficit or added to it. The broader B.C. "community" will give its answer on election day.

 HYPERLINK "mailto:hwinsor@globeandmail.ca" hwinsor@globeandmail.ca

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Vancouver Sun, Page A01, 17-May-2004

Anderson takes on Victoria on election eve

By Maurice Bridge

Federal Environment Minister David Anderson appears to be digging in his heels over potential oil and gas development off the B.C. coast.

In a memo written for the information of all Liberal candidates in the coming federal election, the environment minister restates the federal government's position on the 33-year-old moratorium on offshore oil and gas activity on the West Coast.

"In a nutshell it is that the moratorium stays in place until the knowledge gaps on the risks involved, the resources at stake, and the economic and social factors that might have a bearing on the decision are filled," it says. "Only then will the federal government have the information necessary to make an informed decision."

Anderson's note appears to fly in the face of the provincial Liberal government's stand on re-opening offshore oil and gas exploration and potential extraction by 2010.

In mid-April, the provincial government released its own position paper on offshore oil and gas exploration, which specifically stated "there are no science gaps that need to be filled before lifting the moratoria on oil and gas development."

"Over the past 20 years, a number of scientific studies sponsored by the governments of British Columbia and Canada have concluded that there is no scientific justification for maintaining the federal moratorium," says the paper.

"The most recent of these by the Royal Society of Canada found that provided an adequate regulatory regime is put in place, there are no science gaps that need to be filled before lifting the moratoria on oil and gas development.

"Based on these reviews and an internal assessment of the potential risks and benefits, the province recommends removal of the moratorium to enable the gathering of information to better define offshore resources, assess the resource potential, evaluate environmental risks, and develop appropriate measures for managing these risks."

The focus of the provincial government's interest is the Queen Charlotte Basin, where it is estimated as much as 9.8 billion barrels of oil and 25.9 trillion cubic feet of natural gas may be found beneath the ocean floor. A three-member federal public review panel is currently hearing submissions throughout the province on whether the federal moratorium should be lifted.

The province's stated position is unequivocal: "It is the province's view that the decision on whether to lift the moratorium is a matter of policy rather than of science. As such, the decision requires weighing the public risks and benefits of lifting the moratorium. The province considers that the potential public benefits from an offshore oil and gas industry are too great to ignore."

But Anderson's note is equally forceful: "Put simply, you cannot have a satisfactory regulatory regime based on our current data deficiencies," it says.

Anderson says there has been "some confusion" about the panel, and says its purpose is not to determine whether or not exploration and drilling should take place, but to determine public opinion on offshore drilling, to indicate where the scientific and resource knowledge gaps are, and to determine the views and concerns of First Nations, including the impact of offshore exploration on resource, land or sea claims.

The environment minister points out that "there also has been confusion as to the report of the [Natural Resources Canada] scientific sub-panel, and the comment in its report that if an adequate regulatory regime were in place the moratorium could be lifted.

"Note that those quoting this sentence generally fail to quote the rest of the paragraph, or the assumptions or recommendations that precede it. An adequate regulatory regime can only be established if the current deficiencies in data, the knowledge gaps, are filled. Put simply, you cannot have a satisfactory regulatory regime based on our current data deficiencies."

Anderson also points to developments in the United States, and says he has been informed that "on both the Atlantic and Pacific coasts, all governors of coastal states oppose further drilling."

In a telephone interview Sunday evening, Anderson said he does not believe his memo will ruffle any feathers in Victoria.

"This is the position that we have had all along and there's no reason for them to take any exception to this," he said. "I can't see how a responsible government would recommend that there be a lifting of the moratorium if we don't know what we're lifting and don't know what the risks are that we're running."

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Vancouver Sun, Page A01, 17-May-2004

Students give top marks to four-day school week

By Janet Steffenhagen

Most parents don't like it, but students on a four-day school week in western B.C. say it's great because it gives them more time to watch TV, play video games and hang with friends.

A survey has found that younger students in Coast Mountains school district surrounding Terrace were particularly keen, with 87 per cent saying they prefer four days over five days of school, compared to 85 per cent of high school students.

But 73 per cent of parents who responded to the survey -- one of the most extensive examinations of a concept that has attracted wide interest in B.C. as school boards struggle to balance their budgets -- said they want a return to the five-day week.

Teachers were almost equally divided between those who like the change and those who don't, according to survey results compiled by Malatest & Associates Ltd.

The survey was done in March 2004, with more than 3,000 students at the Grade 5 level and above, and 283 teachers completing a questionnaire during school hours. As well, 541 parents selected at random responded to a mailed questionnaire. (Total student enrolment in the district is 6,020.)

In a four-day system, students receive the same amount of instruction as in a five-day week because the school days are lengthened slightly.

School board chair Lorrie Gowen admitted the survey raised concerns, but suggested reinstatement of the five-day week might create even more since the cash-strapped board would be forced to close schools, increase class size and reduce transportation.

She also said she's not sure the survey is the definitive word on parental views since only 39 per cent of parents were polled.

"I'm wondering what the other 60 per cent thought," she added.

The board, recently rebuked by the courts for not consulting parents adequately before introducing the four-day week last September, will continue community meetings before making a decision May 26 on the future of the experiment.

Coast Mountains is one of only four B.C. school boards to try the four-day week, although seven other districts -- all outside the Lower Mainland -- have entertained the idea.

Coast Mountains followed the lead of Boundary district, which touted the change as a way to save money, improve student behaviour, reduce absenteeism and sharpen the focus on academics.

Nisga'a district has also introduced a four-day week, while Quesnel allowed one small school to reduce its week.

Coast Mountains encountered difficulties almost immediately, when a parent asked B.C. Supreme Court to order a halt to the experiment, saying trustees had not consulted the community adequately.

The court agreed but did not force changes during this school year. As a result of that ruling, the board asked Malatest & Associates to conduct the survey.

The key findings included:

- A majority of teachers said their energy levels had decreased and nearly half said their stress level had increased.

- Almost half of teachers reported having less time to sponsor or coach extra-curricular activities.

- A majority of parents said the time taken by students to complete homework had decreased or stayed the same and 61 per cent of parents said children were less able to get extra help from teachers outside class time.

- Students said they had less free time during the school week but three-quarters said they had more free time on the weekend.

- Half of high school students and 85 per cent of elementary students said their main activities on Fridays included watching TV, playing video games or spending time with friends.

- A quarter of parents said their child-care costs had increased but more than half noticed no change.

The sampling error ranged from two per cent to 4.9 per cent depending on the category of participants.

Gowen said she wasn't surprised that students were more enthusiastic than parents because kids adapt easier.

A return to a five-day week would cost the school district an extra $1.8 million next year on a budget of $47.2 million and would require six school closures, she said. Much of the saving from a four-day week is a result of support workers not being paid. Teachers continue to receive full salary.

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The Daily News (Nanaimo), Page B07, 17-May-2004

Island should focus its energy on energy

By Mike Hunter

Every generation gets to make choices that affect their own lives and the lives of those that follow.The decision to develop a public medicare system in Canada was one of those choices.

The recent decision of the Lower Mainland's TransLink Board to reject a rapid transit line in one of the region's most densely populated areas may turn out to be another.

British Columbians are facing important choices in the field of energy development, choices that will impact the province's economic and environmental performance for a long time. The Energy Policy that was announced in November 2002 by the Minister of Energy and Mines, the Honourable Richard Neufeld, already sets out some of the parameters for the future.

The Energy Policy says that one half of new electrical energy production must come from "clean" sources. Vancouver Island has the potential to become the Saudi Arabia of clean energy. Run of the river, tidal and wind power, and other projects are all in the planning phase; some have been accepted under contract by BC Hydro.

I think we should be looking at the potential of this Island as a net exporter of energy, rather than continuing our traditional reliance on imports from the mainland.

But, energy opportunity is more than electricity. Experts believe that there are significant reserves of hydrocarbons, oil and gas, off the coast of B.C.

The fact is that oil and gas are going to fuel human activity for a long time to come - even hydrogen production to fuel cars on the proposed "hydrogen highway" will require fossil fuels for production. And, as long as wheels turn, oil will be needed to lubricate them.

The potential of the offshore area for oil and gas is constrained by a moratorium on development that was imposed in the 1970's by both Ottawa and Victoria. The province has indicated that it will lift the moratorium if exploration and extraction can be done in an environmentally sound manner. The federal moratorium is being reviewed by a panel of experts.

It is informative to look at experience elsewhere. Norway, a country with a population of four million, developed its offshore oil and gas sector in the late 1970's. Today, Norway boasts a bank account of over $100-billion. Its coastal towns like Stavanger, almost destitute in the 1970s as the fishing industry collapsed (sound familiar?), are now thriving and growing.

There is no reason why B.C. cannot emulate Norway. Oil and gas have provided a generation of Norwegians with education and incomes and a standard of living amongst the highest in the world, with a safe environmental record.

You have the chance to express your opinions to the federal panel which is reviewing the moratorium.

Just email sgedak@nrcan.gc.caYour voice can help us make one of those generational choices.

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Times Colonist (Victoria), Page A01, 17-May-2004

Anderson stands firm on offshore

By Maurice Bridge

Federal Environment Minister David Anderson appears to be digging in his heels over potential oil and gas development off the B.C. coast.

In a memo written for the information of all Liberal candidates in the coming federal election, the environment minister restates the federal government's position on the 33-year-old moratorium on offshore oil and gas activity on the West Coast.

"In a nutshell it is that the moratorium stays in place until the knowledge gaps on the risks involved, the resources at stake, and the economic and social factors that might have a bearing on the decision are filled," it says.

"Only then will the federal government have the information necessary to make an informed decision."

Anderson's note appears to fly in the face of the provincial Liberal government's stand on reopening offshore oil and gas exploration and potential extraction by 2010.

In mid-April, the provincial government released its own position paper on offshore oil and gas exploration, which specifically stated "there are no science gaps that need to be filled before lifting the moratoria on oil and gas development."

"Over the past 20 years, a number of scientific studies sponsored by the governments of British Columbia and Canada have concluded that there is no scientific justification for maintaining the federal moratorium," says the paper.

"The most recent of these by the Royal Society of Canada found that provided an adequate regulatory regime is put in place, there are no science gaps that need to be filled before lifting the moratoria on oil and gas development.

"Based on these reviews and an internal assessment of the potential risks and benefits, the province recommends removal of the moratorium to enable the gathering of information to better define offshore resources, assess the resource potential, evaluate environmental risks, and develop appropriate measures for managing these risks."

The focus of the provincial government's interest is the Queen Charlotte Basin, where it is estimated as much as 9.8 billion barrels of oil and 25.9 trillion cubic feet of natural gas may be found beneath the ocean floor.

A three-member federal public review panel is currently hearing submissions throughout the province on whether the federal moratorium should be lifted.

The province's stated position is unequivocal: "It is the province's view that the decision on whether to lift the moratorium is a matter of policy rather than of science. As such, the decision requires weighing the public risks and benefits of lifting the moratorium. The province considers that the potential public benefits from an offshore oil and gas industry are too great to ignore."

But Anderson's note is equally forceful: "Put simply, you cannot have a satisfactory regulatory regime based on our current data deficiencies," it says.

Anderson says there has been "some confusion" about the panel, and says its purpose is not to determine whether or not exploration and drilling should take place, but to determine public opinion on offshore drilling, to indicate where the scientific and resource knowledge gaps are, and to determine the views and concerns of First Nations, including the impact of offshore exploration on resource, land or sea claims.

The environment minister points out that "there also has been confusion as to the report of the [Natural Resources Canada] scientific sub-panel, and the comment in its report that if an adequate regulatory regime were in place the moratorium could be lifted.

"Note that those quoting this sentence generally fail to quote the rest of the paragraph, or the assumptions or recommendations that precede it. An adequate regulatory regime can only be established if the current deficiencies in data, the knowledge gaps, are filled. Put simply, you cannot have a satisfactory regulatory regime based on our current data deficiencies."

Anderson also points to developments in the United States, and says he has been informed that "on both the Atlantic and Pacific coasts, all governors of coastal states oppose further drilling."

He says a decision by U.S. President George Bush to buy up offshore drilling leases so there would be no drilling within 160 kilometres of the Florida coast "greatly assisted his brother Jeb's re-election." He adds that California Governor Arnold Schwarzenegger has asked that California similarly have offshore drilling leases bought out and cancelled.

In a telephone interview Sunday evening, Anderson said he does not believe his memo will ruffle any feathers in Victoria. "This is the position that we have had all along and there's no reason for them to take any exception to this," he said. "I can't see how a responsible government would recommend that there be a lifting of the moratorium if we don't know what we're lifting and don't know what the risks are that we're running."

He said his memo is not intended to send any kind of message to Victoria.

"We're not saying anything to the province. They have their views. We're happy to discuss this issue with them, and will, but we have no authority to vary the normal process, as I mention in that memo, about environmental assessment or anything else."

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Globe and Mail, Page A01, 17-May-2004

Air Canada seeks last-gasp deal

By John Partridge

Air Canada was trying to break an impasse with two of its largest and most militant unions last night as it sought to reach vital agreements to slash costs and eliminate outstanding grievances, a full day after the expiry of a midnight-Saturday deadline.

Despite inking agreements with five of its seven unions between Friday and the early hours of Sunday morning after marathon negotiations at several downtown Toronto hotels, Air Canada was still about $115-million shy of the $200-million in annual labour cost reductions it has been told it must secure by financiers Deutsche Bank and GE Capital Aviation Services.

Saturday's midnight deadline was imposed by the two financial companies, which have pledged to provide the insolvent airline with a $2.65-billion lifeline. Without it, Air Canada will likely be pushed into receivership by its creditors, raising further doubts about its survival and its 30,000 employees.

Last night, there were apparent stalemates in the airline's negotiations with the Canadian Union of Public Employees, which represents about 6,500 flight attendants at Air Canada's mainline service, and the Canadian Auto Workers union, which represents about 6,000 mainline customer-service workers and another 1,400 maintenance workers and crew schedulers at Air Canada Jazz.

Air Canada is pushing for about $65-million in cost concessions from the flight attendants, along with about $50-million from CAW's mainline workers, in the form of wage cuts, layoffs and changes in work rules. That works out to about $8,000 to $10,000 a person.

Although Air Canada's unions agreed to concessions worth a total of about $850-million last year, the lion's share of $1.1-billion in annual cost reductions the airline pledged to achieve, Deutsche Bank and GECAS have said the additional savings are essential.

Gary Fane, the CAW's national director for the transportation sector, said the impasse with the company was as much to do with "how they treat employees and customers" as it does with money and he would not predict a speedy resolution. "I think we'll be here all night."

CUPE officials, too, appeared to be digging in for another all-night session. However, spokeswoman Alejandra Bravo would say only that "the discussions are still continuing and we're still hopeful."

Air Canada spokesman John Reber confirmed that talks with two unions were continuing and said that "progress is being made." He added that the airline is "encouraged" by the fact that it reached agreements with "the majority of our employees over the weekend."

Deutsche Bank, Germany's largest bank, has agreed to backstop an $850-million equity offering for Air Canada, which has been under court protection from its creditors since April last year, while GECAS, of Stamford, Conn., has agreed to lend it $1.8-billion.

The two companies had threatened to cancel these vital infusions of money if the airline did not secure pacts with all its unions by midnight Saturday on both the cost-cutting and the waiving of most labour grievances currently lodged against the company.

However, GECAS appeared in no immediate rush to pull the plug yesterday, even though deals had not yet been reached with CUPE and the CAW. "Given that the deadline was on a Saturday, I think its effective date is really on Monday," spokesman Eric Jones said. "So we're waiting to hear from the airline and we'll probably have [a statement today]."

A spokesman for Deutsche Bank in New York would not comment on the issue.

Among the key labour deals Air Canada reached over the weekend was one with the International Association of Machinists and Aerospace Workers (IAM). With about 11,500 members - including technical, maintenance and clerical workers - at the airline it is its largest union. A deal was also reached with the Air Canada Pilots Association, which represents about 3,000 mainline pilots.

However, while ACPA has agreed to about $40-million in concessions, its president Don Johnson said yesterday that it still had not reached a deal on grievances.

The IAM also agreed to cut $40-million in costs, but Ron Fontaine, one of its negotiators, said this took a late-night intervention Saturday by Mr. Justice Warren Winkler of Ontario Superior Court, who is currently overseeing the restructuring.

Highlighting the distrust that appears to permeate Air Canada's relations with all its unions, the IAM demanded written assurances from the airline that would reveal the concessions made by management, along with those made by unionized workers. This would show that everyone is taking a "fair and equal hit" in this process and that "no one is getting screwed," Mr. Fontaine said. The IAM met with Judge Winkler around midnight Saturday, he added, "and he fixed it, let me put it that way."

The airline and its unions have already met the other key condition set by the two financiers and pegged to the Saturday deadline.

Air Canada announced Friday that it had reached an agreement with the federal Office of the Superintendent of Financial Institutions under which it will be allowed to pay off a $1.2-billion deficiency in its employee pension fund over 10 years rather than five, the current legal maximum. This pact still requires approval by Finance Minister Ralph Goodale.

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Globe and Mail, Page A01, 17-May-2004

Air Canada inching toward deal

By John Partridge

Air Canada appeared to be inching toward a breakthrough with two of its largest and most militant unions last night as it sought to reach vital agreements to slash costs and eliminate outstanding grievances, a full day after the expiry of a midnight-Saturday deadline.

Having inked agreements with five of its seven unions between Friday and the early hours of Sunday morning after marathon negotiations at several downtown Toronto hotels, Air Canada was still about $115-million shy of the $200-million in annual labour cost reductions it has been told it must secure by financiers Deutsche Bank and GE Capital Aviation Services. The shortfall occurred because it had not been able to reach deals with the Canadian Union of Public Employees and the Canadian Auto Workers union.Saturday's midnight deadline was imposed by the two financial companies, which have pledged to provide the insolvent airline with a $2.65-billion lifeline. Without it, Air Canada will likely be pushed into receivership by its creditors, raising further doubts about its survival and its 30,000 employees.

However, there were signals as last night wore on that the stalemates might be easing in the airline's talks with CUPE, which represents about 6,500 flight attendants at Air Canada's mainline service, and the CAW, which represents about 6,000 mainline customer-service workers and another 1,400 maintenance workers and crew schedulers at Air Canada Jazz, its regional airline.

A source close to the CAW, for example, predicted another tough day of negotiations today, but hinted a deal would indeed be reached. "I think the sun will come up on Tuesday," the source said.

Air Canada is pushing for about $65-million in cost concessions from the flight attendants, along with about $50-million from CAW's mainline workers.

The cost concessions are wanted in the form of wage cuts, layoffs and changes in work rules. That works out to about $8,000 to $10,000 a person.

Although Air Canada's unions agreed to concessions worth a total of about $850-million last year, the lion's share of $1.1-billion in annual cost reductions the airline pledged to achieve, Deutsche Bank and GECAS have said the additional savings are essential.

Gary Fane, the CAW's national director for the transportation sector, said earlier in the evening the impasse with the company was as much to do with "how they treat employees and customers" as it does with money and he would not predict a speedy resolution. "I think we'll be here all night."

CUPE officials, too, appeared to be digging in for another all-night session. However, spokeswoman Alejandra Bravo would say only that "the discussions are still continuing and we're still hopeful."

Air Canada spokesman John Reber confirmed that talks with two unions were continuing and said that "progress is being made." He added that the airline is "encouraged" by the fact that it reached agreements with "the majority of our employees over the weekend."

Deutsche Bank, Germany's largest bank, has agreed to backstop an $850-million equity offering for Air Canada, which has been under court protection from its creditors since April last year, while GECAS, of Stamford, Conn., has agreed to lend it $1.8-billion.

The two companies had threatened to cancel these vital infusions of money if the airline did not secure pacts with all its unions by midnight Saturday on both the cost-cutting and the waiving of most labour grievances currently lodged against the company.

However, GECAS appeared in no immediate rush to pull the plug yesterday, even though deals had not yet been reached with CUPE and the CAW. "Given that the deadline was on a Saturday, I think its effective date is really on Monday," spokesman Eric Jones said. "So we're waiting to hear from the airline and we'll probably have [a statement today]."

A spokesman for Deutsche Bank in New York would not comment on the issue.

Among the key labour deals Air Canada reached over the weekend was one with the International Association of Machinists and Aerospace Workers (IAM). With about 11,500 members - including technical, maintenance and clerical workers - at the airline it is its largest union. A deal was also reached with the Air Canada Pilots Association, which represents about 3,000 mainline pilots.

However, while ACPA has agreed to about $40-million in concessions, its president Don Johnson said yesterday that it still had not reached a deal on grievances.

The IAM also agreed to cut $40-million in costs, but Ron Fontaine, one of its negotiators, said this took a late-night intervention Saturday by Mr. Justice Warren Winkler of Ontario Superior Court, who is currently overseeing the restructuring.

Highlighting the distrust that appears to permeate Air Canada's relations with all its unions, the IAM demanded written assurances from the airline that would reveal the concessions made by management, along with those made by unionized workers. This would show that everyone is taking a "fair and equal hit" in this process and that "no one is getting screwed," Mr. Fontaine said. The IAM met with Judge Winkler around midnight Saturday, he added, "and he fixed it, let me put it that way."

The airline and its unions have already met the other key condition set by the two financiers and pegged to the Saturday deadline.

Air Canada announced Friday that it had reached an agreement with the federal Office of the Superintendent of Financial Institutions under which it will be allowed to pay off a $1.2-billion deficiency in its employee pension fund over 10 years rather than five, the current legal maximum.

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Vancouver Sun, Page F07, 17-May-2004

Lake Ontario water used to cool buildings

By Tony Wong and John Spears

TORONTO

Dennis Fotinos is the first to admit the project in which his company has invested $169 million sounds like the stuff of science fiction.

His story goes like this: First, build a monster pipe more than five kilometres long and a yawning 1.6 metres in diameter.

Stretch that pipe from the foot of Bay Street in downtown Toronto out into the depths of Lake Ontario, about 83 metres down.

The four-degree-Celsius water will be piped back to the city, providing cooling and air conditioning for 100 office buildings, while at the same time providing clean drinking water.

"You're getting cleaner drinking water than you would have, pure, non-contaminated water, and at the same time cooling buildings," says Fotinos, CEO of Enwave District Energy Ltd.

Sound futuristic?

Well, it's already happened.

On July 15, Fotinos will flip a switch at the company's plant near the foot of the CN Tower and create enough capacity to cool the Air Canada Centre, the Steam Whistle Brewing Co., the Royal Bank Tower and dozens of other client buildings in the downtown core that have signed on to the new venture.

On Thursday, Enwave and Cadillac Fairview Corp. unveiled a 25-year deal that will add three of the Toronto-Dominion Centre's five towers to the cooling grid. The TD, Royal Trust and Canadian Pacific towers, totalling nearly three million square feet of floor space, bring Enwave's customer base to nearly 10 million square feet.

Electricity will still be needed to circulate cool air through the buildings and to pump cold water up to the mechanical rooms, but the main cost of operating chillers is eliminated.

Toronto is the only municipality in the world attempting anything similar on this scale. Environmentalists are hailing the project because it will eliminate 40,000 tonnes of carbon dioxide a year, the equivalent of taking 8,000 cars off the city's streets.

But Toronto taxpayers are on the hook if it fails. Forty-three per cent of Enwave is owned by the City of Toronto, while 57 per cent is owned by the Ontario Municipal Employees Retirement System.

So a lot is riding on the shoulders of Fotinos, a former Toronto councillor who has been president of Enwave for three years.

"People have called this the white elephant or the big black hole, so we're very conscious of that, especially with the kind of scandals that the city now faces," he says.

Costs have leaped from an estimated $125 million to as much as $195 million. Fotinos now says the final bill should be $169 million.

"The environmentalist in me would like to see this work, while the economist in me is hoping that they have got a good handle on all the figures and there are no surprises for the taxpayer," said Donald Dewees, acting chair of the University of Toronto economics department and an expert in the energy industry.

"In projects of this magnitude you're always concerned about whether the accounting has been done exactly right."

Fotinos is adamant that there will be no surprises such as the city's $43-million computer leasing deal with MFP Financial Services Ltd. which almost doubled in cost.

He points out that his bosses at the pension fund expect a nine to 10 per cent rate of return over a 20-year amortization period.

Enwave is expected to break even by 2008, by which time construction on pipelines is expected to be completed and lines will be at capacity.

When the official launch occurs in July, Enwave will be operating at 40 per cent of its eventual capacity. More pipes will be added as customers come on board.

Enwave got a publicity boost in 2002 from environmental activist Robert F. Kennedy Jr., who helped unveil the cooling plant, but the company has been largely invisible since then. "I think we suffer from typical Canadian syndrome, where you have to be recognized internationally first," said Fotinos.

At current electricity prices, Andrew McAllan, a vice-president at OMERS-owned Oxford Properties Group, says he's not actually saving anything on his energy bill by going the Enwave route. So why bother?

McAllan says the energy cost may be similar but not the capital cost of replacing air conditioning equipment. McAllan's One University Avenue building, built in 1986, was the first office tower to sign on to the deep-water cooling program, and has already saved $580,000 by not replacing chillers on the roof, which typically have a lifespan of 25 years.

"That's a pretty compelling reason right there," said McAllan. The Royal Bank Plaza -- 1.6 million square feet -- also needed new chillers. "It would have cost us millions to replace, and we would have had to take apart the building and use helicopters."

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Vancouver Sun, Page F03, 17-May-2004

Port an important local, provincial and national asset

By Don Cayo

Most industries pack up and move to the 'burbs or beyond when congestion and land prices in the centre of the city become too much to bear.

Ports and their myriad spin-off businesses do not. Most of their activity must, almost by definition, take place within the confines of the natural protections that led to their establishment -- indeed, to the very founding of their cities.

So our port -- a national asset that moves $30-billion worth of goods a year -- is here to stay. And that, despite some two-way tensions, is a very good thing.

A new study underlines the value of the Port of Vancouver and its associated companies and workers -- shipping agents, insurance brokers, warehouse operators, export/import firms, rail crews, truckers, cruise-ship suppliers, and on and on. Together they pay a whopping $118 million a year in property tax or grants to Greater Vancouver municipalities, plus $17 million more to other places around B.C.

And that doesn't include the two smaller ports, run by separate authorities, on the north and south arms of the Fraser River.

The largesse trickles, at least a little bit, into every municipal office in the Greater Vancouver area except for Bowen Island. And in North Vancouver, the city and the district, it makes up well over 20 per cent of municipal revenue.

The study, prepared by InterVistas Consulting for the Vancouver Port Authority, doesn't carp about the ever-rising cost of doing business in this ever-more-expensive town. Indeed, it doesn't advance any argument at all -- it merely measures and records port-related contributions to government coffers.

But I suspect the fact that it was commissioned at all reflects the tension between a blue-collar hold-out that finds itself awash in a wave of gentrification.

On one hand, a working port no longer fits very well into Vancouverites' evolving image of their town. Warehouses and working wharves interrupt our pleasant walkways and bicycle paths. The ungainly silhouette of container cranes or storage structures is jarring in a skyline of sleek glass towers and misty mountains. And the land they sit on would be soooo nice for a few more million-dollar condos.

On the other hand, if your view is from an office window in one of the utilitarian buildings that lurk behind chain-link fence, the cost of doing business here is getting out of hand.

The Wharf Operators Association convinced the provincial government to cap tax rates for port businesses -- but not the many spin-offs -- last fall at $27.50 per $1,000 of assessment. That's still high. It's about seven times more than the residential tax rate in North Shore municipalities, and three or four times more than most West Coast American port operators pay.

And the assessment base to which the rate applies is spiralling in the midst of the current real-estate boom.

Captain Gordon Houston, CEO of the Port of Vancouver, tells me that even the assessed value of the port's substantial holdings of "submerged land" -- i.e. water -- is up 117 per cent. Good grief.

The study totes up the port authority's grants in lieu of taxes ($3.4 million a year), plus property tax paid by port tenants ($16.3 million), plus the amounts paid by associated off-site businesses and the people who work at port-related jobs.

The jurisdictions with big facilities get the big bucks -- Vancouver $42.6 million, the City of North Vancouver $18.6 million, the District of North Vancouver $11.3 million, Delta $9.4 million and so on.

But even little Anmore and Bellacara get, respectively $32,000 and $13,000, or 2.4 and 1.1 per cent of their total budgets.

This study may not cut much ice with those local politicians -- all of them on the councils that are big winners in the port-tax sweepstakes -- who've been griping about the provincial cap. But it should. The study notes that our port generates 62,000 jobs across Canada, mostly near here, and $565 million in federal and provincial revenue in addition to all that municipal lolly. In other words, it's an important local, provincial and national asset.

Besides, I like the view from my office window. It looks east from the foot of Granville Street over the Sea Bus terminal and the HeliJet pad. I love the juxtaposition of those awkward cranes -- they look like giant war machines from a Star Wars movie -- with haze-softened mountains behind.

This image offends my urban sensibilities not at all. And it reminds my every day of my city's past, present and future.

dcayo@png.canwest.com

ON THE WATERFRONT:

Port of Vancouver property-tax contribution as percentage of municipal revenues:

Anmore 2.4

Belcarra 1.1

Burnaby 3.1

Coquitlam 2.1

Delta 7.8

Langley (city) 2.6

Langley (township) 1.6

New Westminster 1.6

North Van (city) 23.4

North Van (district) 20.4

Richmond 1.9

Surrey 2.7

Vancouver 4.6

Source: Port of Vancouver

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Vancouver Sun, Page F04, 17-May-2004

Outlook for week keys on oil costs, consumer price index

By Lynn Moore

MONTREAL -- Crude oil prices should continue to hold court this week amid deepening concern about the economic impact, at home and abroad, of soaring fuel costs.

Canadian analysts will be diverted by the Ontario budget Tuesday and Thursday's statistical snapshot of April inflation provided by the consumer price index numbers, which are expected to rise sharply.

At the end of the week, interest may drift to the anticipated election call by Prime Minister Paul Martin, a call expected to land on Sunday for a June 28 vote.

The supercharged crude oil price -- which topped $41 US in New York last week -- will be closely watched because of its impact on inflation in the near term and its potential impact on the global economy, BMO Nesbitt Burns economist Douglas Porter said.

Avery Shenfeld, senior economist for CIBC World Markets, agreed. "Crude oil is now becoming a scare story for financial markets in general. We are reaching levels that are going to have a material impact on economic growth if sustained, as does seem likely," Shenfeld said.

The underlying world demand for energy is not likely to change soon. The futures market shows that "companies are willing to buy oil -- a year out -- at prices in the high $30s [US] that they previously thought were unsustainable," Shenfeld said.

Thursday's release by Statistics Canada of the prices for the goods and services included in the CPI basket may rattle some investors, Porter said.

"Everyone has been operating under the assumption that Canada's inflation is very well behaved" with the runup in gasoline prices as an isolated event that won't lead to an outbreak of wider inflation, he said.

"But I think April's and May's results -- when released next month -- could test that assumption, because we are going to see a real bounce in both headline and core inflation," Porter said.

"Both are going to move up to over l.5 per cent, probably both still below two per cent [the Bank of Canada inflation target], but that's miles away from where they were a couple of months ago," he said.

In March, the prices were 0.7-per- cent higher than in March 2003 and the March increase was identical to the increase in February, which was the smallest since Dec. 2001.

Core inflation excludes the eight most volatile components, as defined by the Bank of Montreal. Excluded items include fruits and vegetables, and fuel and tobacco products.

While the consensus is that the CPI will jump l.8 per cent year-over-year, Porter puts that figure at l.9 per cent.

Analysts will be watching to see how the relatively new Liberal government in Ontario and Finance Minister Greg Sorbara deal with the provincial deficit, Shenfeld and Porter said.

If they rely "on tax hikes or revenue measures more than expenditure restraint, then I think, ultimately, that could be negative for Canada's largest province" which also holds the largest provincial deficit, Porter said.

Neither economist expects the markets to move upon the budget's release.

"At least in the provincial bond market, Ontario has done a good job telegraphing the mess that the budget is now in and that it is going to be a gradual path to improvement," Shenfeld said.

As far as the federal election is concerned, the market figures the "Liberals are likely to win a majority government but the polls are close enough to keep it an open issue" through the campaign, Porter said.

If polls should veer toward a minority government during the campaign, the Canadian dollar could start to roll, he said.

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Vancouver Sun, Page C06, 17-May-2004

BC Film makes it work as government funding dwindles

By Lynne McNamara

Rob Egan is a patient man. Though core funding for his private, non-profit society, BC Film, of which he's president and CEO, has dwindled since 1995/96 from about $4.5 million to its current level of $2.28 million, he understands.

"Having worked in government, and knowing what the fiscal circumstances are of the current government," he says, "I was not surprised. I was disappointed, and then the optimist in me took over. I take to heart the comments that folks speaking on behalf of the ministry have made that as the fiscal climate improves that restoration of funding will be considered."

BC Film, established in 1987 with a mandate "to expand and diversify the cultural industries of film and video in British Columbia," offers development and production financing to B.C. producers, writers and directors of film through a variety of funding, professional development, marketing and skills assistance programs. It also administers programs such as Film Incentive BC (economic incentives to encourage production in the province), the Production Services Tax Credit (a corporate tax incentive available to both Canadian and foreign production companies who shoot here), and the BC Feature Film Fund ($4 million contributed by the province, which has contributed to more than 23 feature films over the past three years) as well as help with marketing, an internship program, training initiatives and a bursary fund.

The society operates at arm's length from government, reports to a board of directors, and receives a majority of its operating funding from the provincial government through the Ministry of Competition, Science and Enterprise.

The biggest blow for BC Film came at the end of the 2003 fiscal year, on March 31, when the Feature Film Fund was not extended by the provincial government. And though direct funding to BC Film has declined in recent years, its tax credit program has been unaffected; in fact, it has been augmented by changes that the provincial government made last year to introduce a digital animation or visual effects credit, a new credit now available as an add-on to the film incentive or services credit.

"There are a variety of policy instruments that are available to governments -- tax credits, equity investment, corporate tax structure, provincial sales tax -- and so I think that governments look at all these instruments and within their ability to find the money for those things and within the range of other pressures that you inevitably face when you're governing, you have to make some choices," says Egan, who grew up in Haney and graduated from Garibaldi senior secondary where a teacher, Austrian immigrant Julius Borsos, was a huge influence.

Borsos' son, the late Phil Borsos, who became a well-known filmmaker (The Grey Fox, Far From Home: The Adventures of Yellow Dog) was a year behind Egan at school.

"Philip is always someone that I think about in terms of Canadian filmmakers, because I'm always thinking that somewhere out there there's the next kid who's making films in high school and has the talent and the passion and the vision to actually pursue it."

Egan recalls an early film experience. His older sister took him to see the classic Alfred Hitchcock film, The Birds, at the Haney theatre. "That's one of my early memories of being affected by a movie. I always loved going to the movies, and I've always continued to be an admirer and consumer of the big screen."

After graduating in history and political science from the University of B.C. (where he also studied film and theatre), Egan moved to Montreal in 1973 to do a masters degree at McGill in political science.

He later taught at junior college in Peterborough, Ont., and in 1981 began longing for B.C.

"Those Ontario winters are long and hard and cold, I looked at the map and thought, 'It's time to be heading home.' I got in the truck and moved back to Victoria," he says with a laugh.

He first worked as a partner in a research consulting firm, and for a campus radio station at U Vic.

Next, as assistant deputy minister of culture for the provincial government, he found himself winding his way back toward film when in 1996-97 the government was looking to implement a tax credit program.

"That landed on my desk and I started working closely with the film industry around the consultation and policy and legislative design of the program."

One thing led to another and he landed at BC Film in 1998, just as the program was being implemented.

"So looking back on it, it was actually a very unique opportunity to be involved in a film-related program from the time it was a gleam in someone's eye to the implementation and delivery, then seeing the benefits of it over a number of years."

Egan and his staff have been involved in recent weeks in a program review, meeting with many of the stakeholders they serve in the BC industry -- producers, distributors, new media and broadcasters -- seeking advice on what they see as being the key strategic needs to support continued growth in the domestic sector in particular.

"We're hoping in the next few weeks that we're going to sort our way through that consultation and the research that we've been doing and create an innovative program menu that within budget constraints will help support continued production and development of projects and marketing of projects over the course of the next year.

"We are ever hopeful that funding will be increased at some future point, but that's out of our hands, that's a decision that government will make. We are appreciative of the support that the provincial government provides to the industry.

"Would BC Film like more money? Absolutely. But at the end of the day, I'm very much one of those people -- you play with the hand you're dealt -- and that's what we're doing right now. We know what our fiscal constraints are and the challenge for us is to try to come up with an innovative program that will support domestic activity."

And it's the passion of local filmmakers that inspires Egan.

"I marvel at it. I'm always amazed at the resourcefulness. I see some of the young emerging filmmakers, who are able to work wonders with $100,000 or less. It is remarkable. I wish we could find a way of bottling it," he jokes. "There's never a day that you get up in the morning and don't want to go to work, because it's inspiring."

 HYPERLINK "mailto:thebacklot@shaw.ca" thebacklot@shaw.ca

Lynne McNamara's Backlot appears Monday, Wednesday and Saturday.

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Vancouver Sun, Page B03, 17-May-2004

Falcon to speak at chamber lunch

MAPLE RIDGE - Transportation Minister Kevin Falcon will be the featured speaker at the next local chamber of commerce lunch.

Tickets are still available for the May 20 event at the Pitt Meadows Golf Club at 11:30 a.m. The cost is $30 for chamber members and $45 for non-members. To register or for more information call 604-463-3366.

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Vancouver Sun, Page B02, 17-May-2004

Council will have plan in place when mayor begins campaign to win federal seat

NORTH VANCOUVER - District councillors should have a plan in place by next week for handling the absence of Mayor Don Bell once he starts campaigning as a candidate in the federal election.

Bell, the Liberal candidate in the North Vancouver riding, said at this week's council meeting he intends to take unpaid leave as soon as campaigning starts in earnest. With rumours that the election will be held June 28, Bell said he would likely start on the campaign trail five weeks earlier than that. He plans to resign as mayor if he becomes an MP, but will return from unpaid leave if he fails.

During his absence, councillors filling in as acting mayor will pick up his duties.

Coun. Alan Nixon said it would be a good idea to prepare for potential conflicts of interest and talk about whether acting mayors would need to work full-time hours and whether they should be paid accordingly.

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Vancouver Sun, Page B02, 17-May-2004

GVRD asked to produce report card on city's balance of growth, livability

NORTH VANCOUVER - City council wants a report card from the GVRD indicating how well they are doing at fulfilling the vision of a "livable region."

Councillors decided to ask GVRD representatives to attend the June 21 council meeting to comment on how the city has done so far in meeting the objectives of the Livable Region Strategic Plan.

Councillor Darrell Mussatto, who came up with the idea, said he would also like to know if the city should be doing more.

The plan is the blueprint for managing growth in the Lower Mainland while maintaining the region's attractiveness. Mussatto said he would like to hear about acceptable housing types, transportation alternatives and the importance of creating a town centre.

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Vancouver Sun, Page A04, 17-May-2004

Martin wants MPs to have say in Supreme Court nominees

By Janice Tibbetts

OTTAWA -- Prime Minister Paul Martin plans to give federal MPs a new role in screening his chosen nominees for the Supreme Court of Canada, flying in the face of advice in a report that he commissioned on how to make the appointment system less secretive.

"The prime minister has said there must be Parliamentary review and input of nominees and he's committed to seeing that happen," said his spokesman, Scott Reid.

Reid said the new system will be in place to fill two seats on the Supreme Court that open in June with the departures of justices Frank Iacobucci and Louise Arbour. In a report last week, the all-party justice committee steered clear of the controversial prospect of allowing politicians to scrutinize nominees.

Instead, the majority recommended changing the 129-year-old Supreme Court appointments system by establishing an advisory committee that would privately prepare a short list of candidates for the justice minister, who would make one or more recommendations to the prime minister.

The panel would be composed of members of the public, MPs from all parties, judges, lawyers, and provincial representatives.

Under the current system, the justice minister privately and informally consults with the legal community before making one or more recommendations to the prime minister.

Reid said Martin is "positively inclined" toward the report's proposal, but that he plans to take the committee's advice a step further to fulfill a promise to give MPs a role in scrutinizing the prime minister's chosen candidate.

Liberal MP Derek Lee, chairman of the justice committee, said he thinks his Liberal colleagues, who signed the majority report, were overly cautious in their recommendations after experts advised against political vetting of nominees for fear it would taint the respected Supreme Court and discourage the best candidates from coming forward.

"They may have been so cautious that they low-balled a potential role for Parliament," said Lee.

But he said he believes MPs can avoid a "public circus" by scrutinizing a nominee behind closed doors and having a formal protocol that includes "no-go areas" so that questioning does not become too personal.

"Transparency doesn't mean you do everything in public, it means Parliamentarians acting on behalf of their electors get to see what's going on," said Lee. "There's nothing wrong with the prime minister asking Parliamentarians to scrutinize his work."

The majority report from the committee made a more watered-down recommendation that the justice minister should appear before the committee to explain an appointment rather than subjecting a judge to questioning.

Martin has promised to give committees more power as part of his campaign to address the country's "democratic deficit." He asked the justice committee earlier this year to study the issue of Supreme Court appointments.

Lee defended the prime minister's plans to override the report, saying it was only "advice" and it was not unanimous.

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Vancouver Sun, Page A05, 17-May-2004

Liberal points finger at Chretien's office

By Kate Jaimet

OTTAWA -- Political direction for the scandal-plagued $250-million sponsorship program came directly from the office of Prime Minister Jean Chretien, Liberal MP Walt Lastewka said Sunday.

Speaking on CTV's political program Question Period, Lastewka said statements by Chretien's former chief of staff, Jean Pelletier, made it clear the Prime Minister's Office and former public works minister Alfonso Gagliano gave political direction to the program.

"I think it was very clear," Lastewka said in response to a question. "Mr. Pelletier ... said: 'My office was involved.' He said the minister's office was involved. We know that there was over-involvement by the minister and the Prime Minister's Office."

Lastewka stopped short of saying that Chretien himself was involved in the awarding of sponsorship contracts to events and to advertising agencies.

"The other unanswered question is: to what extent did [Pelletier] get directions from his boss, the prime minister himself?" asked Conservative MP Jason Kenney. "We also don't know exactly what the current prime minister, Mr. Martin knew, and when he knew it, why he authorized hundreds of millions of dollars to flow into this secret unity slush fund."

The sponsorship program channelled $250 million of public funds into events, mainly in Quebec, through a handful of Liberal-connected advertising agencies. The government defended the program as a way to raise Canada's profile in the independence-minded province after a close call in the 1995 referendum. But Auditor-General Sheila Fraser's report this spring found the awarding of the contracts "broke every rule in the book" and that ad agencies skimmed off exorbitant fees, totalling $100 million.

An incomplete probe into the matter by the House of Commons Public Affairs Committee was shut down last week in the runup to an expected election call next weekend. The probe still has not answered the question of why the rules were broken and who benefitted from breaking them. Nor has it managed to account for all of the missing money.

Pelletier, who appeared before the committee in early April, did testify that he met frequently with the bureaucrat who ran the program, Chuck Guite. Guite now faces charges of fraud in connection with the program.

But in his testimony, Pelletier said that the Prime Minister's Office did not tell Guite which events to sponsor or which advertising firms to use. He also said the PMO did not authorize Guite to break the rules.

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Vancouver Sun, Page A05, 17-May-2004

Think price of gas is high now? Learn to live with it, say analysts

By Tarina White

CALGARY -- Canadians eyeing the latest sport utility vehicles may want to reconsider purchasing a gas guzzler as oil industry analysts predict the recent jump in the price at the pumps is just the beginning of the ballooning cost of fuel.

Increased demand for crude oil worldwide -- particularly in Asia -- has stretched supply thin and pushed the price of oil upwards of $40 a barrel, said Jeffrey Rubin, chief economist for CIBC World Markets.

And this is merely the floor of the price of oil, which could reach $50 a barrel this summer, added Rubin.

"There is no supply capacity to meet this acceleration in demand and ultimately that's why prices are rising -- and likely to rise even further," Rubin said during a panel discussion on current affairs television program Global Sunday.

The average price for a litre of regular gasoline is now hovering around 90 cents in most provinces.

In the last 12 months, the average cost of a litre of gasoline paid by Canadian motorists was 73.3 cents, according to the Canadian Taxpayers Federation.

And although prices at the pump are expected to drop by the end of summer, the long-term outlook appears bleak, said Michael Ervin, president of Calgary-based MJ Ervin and Associates, which specializes in petroleum marketing.

That's because global demand for crude oil is not expected to wane. "Long term, we've got to live with higher gasoline prices," said Ervin.

Peggy Kirkeby, vice-president of the Consumers Association of Canada, agreed.

"I think people should be prepared that this is the way of the future," said Kirkeby.

She expects this message will further infuriate Canadian drivers, many of whom have called and e-mailed the association with angry comments about the hike in gas prices.

"Consumers are really frustrated," said Kirkeby. "We're very happy with our cars and we like to drive."

In the past, higher fuel costs have resulted in surcharges being applied to deliveries, said Kirkeby.

The latest gas hike could end up hitting consumers in the pocket with increased surcharges on airline tickets, she added.

Trucking companies could also up costs, which would have a "trickle down" effect on the price of merchandise.

"If this is a long-term thing ... I can see people second-guessing their decision to buy big SUVs," said Kirkeby.

Appealing to the Canadian government for fuel tax relief -- on average, 42 per cent of the price of a litre of fuel is taxes -- isn't a viable solution, said Rubin.

"I think down the road what you're doing [if you cut fuel taxes] is actually accelerating even more rapid increases in oil prices," said Rubin.

Instead, he said consumers need to face the reality that "the usage of oil is going to have to change."

As yet, Canadians have not become more reserved about their driving habits and are filling up with the same level of frequency, said Ervin.

"We haven't even seen a dent in consumption," said Ervin.

"I really wonder if we're at that psychological point yet where people are really going to change their behaviour patterns."

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Vancouver Sun, Page A05, 17-May-2004

Healthiest jobs tend to be those that pay the most

By Chris Zdeb

EDMONTON -- The parking-lot attendant sat in his booth, silently fuming, as the irate parker ranted on about him not giving her the cheaper early morning rate even though she had arrived 20 minutes too late. As she stomped away, the attendant stuck his head out the little window and in an agitated voice yelled after her: "Lady! I am not an animal, I am a human being!"

If you're in a job where you have to remind people of the difference, your job is definitely not good. And if it's not good, it's not healthy.

What constitutes a healthy job is a complex issue, says Jeremy Beach, an associate professor in the department of public health sciences at the University of Alberta who specializes in occupational and environmental medicine.

By the numbers, occupations with lower accident and fatality rates are considered healthier than the alternative. These tend to be desk jockey type jobs in an office setting. Unhealthy occupations are usually manual labour and involve working with dangerous machinery or around carcinogenic materials.

"Generally speaking, the healthiest jobs tend to be those that pay the most money because there's definitely a relationship between income and health," Beach says. Judges, lawyers and doctors fall into this category, as do tenured professors.

After income, the criteria of a healthy job tend to become more subjective. The healthiest jobs -- the kind you look forward to going to -- tend to share the following characteristics: manageable stress, relative security, flexibility, a boss who supports you and values what you do, and some control over the work. But if you like taking direction, a job that has very little will cause you stress, Beach says.

Monster.com, a career website, in consultation with Jobs Rated Almanac, 2001 and Best Jobs for the 21st Century, compiled a list of the top 10 healthiest jobs. Florist is high on the list.

Kelsey McKinney is a florist and she says she loves her job. She loves flowers and most of the people who come into the shop, where she works, are in an upbeat mood, picking up blooms for such happy occasions as Mother's Day, weddings and birthdays. McKinney also arranges flowers, which allows her to be creative and her environment is always beautiful and always smells good, she says laughing.

The monster.com list also includes such literally healthy occupations as massage therapist and yoga instructor. It doesn't surprise Alison Irwin.

"A big part of your job is being relaxed and guiding other people through relaxation and poses," the yoga instructor says.

When she works, Irwin is well paid, but overall hers is not a high-paying job. However it's a lot less stressful than her old job -- teaching junior high.

It stands to reason that working in a job involving health should be healthy because you have a good understanding of how to take good care of yourself. But knowing what to do and doing it are two different things, says Beach. Nurses, for example, have a high prevalence of smoking.

Finally there is the individual component to what constitutes a healthy job. We're all different, so one person's idea of a healthy job could be considered unhealthy by another.

A flatus odour judge, for example, is listed as one of the worst jobs in science, but Michael Levitt, the world's leading and sole researcher of flatulence, calls it a wonderful job. Okay, he's likely alone in thinking that, but he proves a point.

TOP 10 HEALTHIEST JOBS:

- Yoga Instructor

- Personal Trainer. Works with individuals to help them lose weight and get in shape. The work requires them to work out with clients, thereby benefitting from the extra exercise.

- Professor. They have a relatively high income, reasonable job security, relatively high educational level and they largely control their job.

- Florist

- Activity Specialist. Coordinates recreational pursuits at hotels, nursing homes and other facilities. Focuses on staying fit and helping others to maintain an active and positive attitude toward life.

- Chiropractor. Treats patients with back problems and other spine-related ailments. Focuses on a holistic attitude towards health.

- Choreographer. Arranges dances and dance themselves.

- Massage Therapist. Performs massages at health clubs, spas or private sessions. Focuses on relaxation. A hands-on job requiring therapist to be fit. Benefit of working in a peaceful setting.

- Nutritionist. Works with patients and other clients to craft proper diets. They think about what they eat all the time.

- Running Coach. Mentors and motivates athletes. Often runners themselves.

STRESSFUL AND DANGEROUS:

Seven super-stressful jobs

- Air traffic controller

- CEO

- Firefighter

- Police officer

- Taxi driver

- Farmer

- Junior high school teacher

Ten dangerous jobs

Top 10 most dangerous jobs in Canada (by death rate per 100,000 workers, 1988-1993):

- Mining and quarrying: cutting, handling, loading

- Construction: insulating

- Mining and quarrying: labouring

- Air pilots, navigators and flight engineers

- Timber cutting

- Log hoisting, sorting and moving

- Net, trap and line fishing

- Truck driving

- Construction: labouring

- Construction: pipefitting and plumbing

Source: Statistics Canada using Workers Compensation Board data from across the country.

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Vancouver Sun, Page A08, 17-May-2004

Appointing candidates can cut both ways

Prime Minister Paul Martin's appointment of candidates in British Columbia has created a controversy that is sure to become an integral part of the coming election campaign.

The most recent brouhaha came last week when the entire Liberal executive in the riding of Burnaby-Douglas resigned to protest the appointment of B.C. Liberal party president Bill Cunningham as the candidate.

Two other Liberals in the riding, Tony Kuo and Tony Lee, had been hoping to vie for the same nomination.

One of the disgruntled executive members had this to say: "No democracy. No respect. So we all quit.

"Mr. Martin is nice to listen to when he talks about democracy, but to practice what he preaches would be better."

To some degree, Mr. Martin created this political problem.

When former deputy prime minister Sheila Copps and Transport Minister Tony Valeri were fighting for the Liberal nomination in a riding in Ontario, the PM said, "This is a battle taking place locally ... I wish it wasn't happening, but I am not interfering in any of these battles between incumbents."

At the same time, Liberal party brass have also said in the past that Mr. Martin would hand-pick ethnic candidates and women to better reflect the Canadian mosaic in Parliament.

But since he is the one who pledged to do politics differently and to address the democratic deficit, the PM is facing an angry backlash from within the Liberal party.

Mr. Martin has appointed 14 candidates across the country. Appointing candidates has become a tradition in the Liberal party. Before the 1993 election, prime minister Jean Chretien appointed three candidates; in 1997, he appointed 14; in 2000, he appointed three.

There is some justification to appointing candidates. Strictly speaking, it is not anti-democratic because political parties are institutions unto themselves and are free to set their own ground rules.

The appointments enable parties to give female candidates, always in short supply, a boost in securing nominations. They also enable a party leader to put in place candidates who would be the leader's personal choices to serve in cabinet if they win their ridings in a general election.

In B.C., a longstanding problem for the federal Liberals has been an inability to recruit top-notch candidates who could give the province greater clout in Ottawa's senior political ranks.

Mr. Martin clearly is making an effort to address that challenge in making sure skilled and experienced people like Dave Haggart, David Emerson, Ujjal Dosanjh and now Bill Cunningham, get the chance to run.

The practice is risky, however, because people take offence, as we've seen in Burnaby-Douglas. Many party members naturally feel they are equipped to make their own choices regarding whom they'd like to represent them. They resent interference from on high.

They also argue, reasonably, that it's fairer to have a level playing field for all nominees.

If Mr. Cunningham is such a good pick, why wouldn't he be able to win the nomination on his own steam? This is an especially good question in Mr. Cunningham's case because, as party president, he is far from a novice at the game of electioneering.

In the end, it is the voters in the riding who get to choose their member of Parliament and democracy does prevail.

If British Columbians in those six ridings where appointed Liberal candidates are running decide they don't like Mr. Martin's action, the preferential treatment these individuals received could wind up hurting them in the election.

Voters thus will not only be passing judgment on the merits of the hand-picked candidates, they will also be passing judgment on the Liberal leader's behaviour. Which is exactly as it should be.

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Vancouver Sun, Page A09, 17-May-2004

Martin has given B.C. a team that can deliver

By Iain Nicol

For a long time, British Columbians have complained about their lack of clout in Ottawa. Now, the federal Liberals have taken decisive action to put forward a strong team of candidates.

Some have said that appointing candidates is not "democratic." Is it democratic to elect a candidate whose primary credential is to sign up busloads of new members? No. Prime Minister Paul Martin has acted in the public interest, by ensuring he has the team that he thinks can deliver for B.C.

The alternative is to let nature run its course, as with the Conservatives. Whereas the Liberals offer a broad spectrum of candidates ranging from a union leader, a First Nations leader, a former premier, a former Reform MP and a corporate CEO, the Conservatives have put forward a middling team of political careerists.

The next time you hear complaints about the "democratic deficit" from Conservatives, ask them about their talent deficit and gender deficit, because those deficits will be staring at us at the ballot box.

Iain Nicol

Maple Ridge

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Vancouver Sun, Page A09, 17-May-2004

Democracy in Canada is but a sad memory

By Gray Hawksbee

How on earth can Paul Martin mouth the word "democracy" with a straight face when he and his party continually thumb their noses at the very concept? By appointing (dictating?) Liberal candidates in key ridings, he and his party are hijacking the electoral process at the grassroots level.

Democracy is becoming a sad memory in this country, having being replaced with the socialist ideal of "government by people who know better than us." One can only hope that an intelligent electorate will recognize these "parachute politicians" for exactly what they are, and hand them all humiliating defeats in the upcoming election.

Gray Hawksbee

Delta

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Vancouver Sun, Page B03, 17-May-2004

B.C.'s aging population

B.C.'s total labour force is over two million workers and leading the way are clerical workers with nine per cent of the workforce. Sales and service workers are next at eight per cent and retail sales place third in the province with four per cent of the workforce.

The median age (half the population older and half younger) in British Columbia in 1971 was 27.8 years and by 2004 that age had increased to 39.2. Projections put that figure at 45.7 in 2031.

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Vancouver Sun, Page F01, 17-May-2004

The high cost of raising a family

By Michael Kane

What price a home filled with music, laughter and happy, well-rounded children on track to becoming confident, comfortable adults?

Most parents will tell you that's worth any price and North Vancouver's Patti and Alan Smyth are no exception. They blended their families five years ago and now have four children to feed, clothe, finance and enjoy.

"There is always something to pay for but they are really fun and they are very good," Patti Smyth says of her brood: Marina, 16, Tara, 14, Julia, 12, and Thomas, 10.

Smyth, 37, is an investment specialist with VanCity Credit Union, but confesses that she hasn't tallied up the family expenses in detail. She laughs: "Once in a while we go through it at the kitchen table when we are wondering why we are so broke."

Both parents work full time. Alan, 43, works with AMS Industries, his family's metal-spinning business.

Ask any family about budgeting and they will tell you the biggest variable is the cost of raising children because so much depends on their ages, interests and activities.

"Food is probably our biggest monthly expense, other than the mortgage, especially with the children getting older," Patti Smyth says. "The grocery bill is massive, between $1,200 and $1,500 a month."

While the latest survey shows the cost of raising a boy through age 18 is up $4,000 to $164,483, that's only the start of the story.

Girls, who cost less to feed but more to clothe, come in a little lower at $163,464, but that's still up more than $3,000 in one year, according to the home-economics department of Manitoba Agriculture, the only province to publish an annual study of child-care costs.

The study has relevance across the country. Ottawa says there is little regional variation in the proportion of family income devoted to children. The amount a family spends is directly related to the means of both parents: the more they earn, the more they spend on the kids.

The Manitoba home economists caution that even needs can be subjective, depending on a family's income, values, goals and lifestyle.

For example, they calculate the cost of recreation, reading, gifts to others and school needs on only the basic needs for the well-being of a child. The Smyth family demonstrates how costs can easily double or triple depending on age and involvement in recreational activities.

The home economists include reading materials, toys and games, a bicycle, some sports equipment, and membership or lessons in one activity. They exclude more expensive interests such as private music lessons, dancing or gymnastics, competitive hockey or soccer.

School needs cover school supplies, clothing for physical education and some incidentals. They do not include "optional" expenses related to graduation, seemingly endless school fundraisers to which parents are expected to contribute, or savings for post-secondary education.

Like many middle-class families, the Smyths also pay for private lessons and tutoring, musical instruments, dance costumes, band trips, summer camps, sports fees and equipment, and education savings plans.

For security, and to manage the logistics of a large and active family, everyone has their own cellphone. It's also a safety feature after an attempted abduction in their Seymour neighbourhood last year.

The children all have bank accounts -- the older two also have debit cards -- and each receives an allowance of $40 a month. They have persuaded their many relatives to give them cash or gift cards, rather than gifts, on birthdays and holidays.

"We buy them the equipment they need to do what they want to do, but if they want an extra or a more luxurious version, they can get it themselves," Patti Smyth says.

"They have learned to save for what they want and they are actually very good about sharing clothes. The older girls shop the sales and they have picked up frugality, somewhat, but of course it is only particular stores that they will go into."

Everybody skis or snowboards in the winter but they share or pass on clothing and equipment, rather than being slaves to fashion.

The children are expected to do chores around the house, including cleaning their own bedrooms, but they can make a little more money by doing extras like washing a car.

None of them works outside the home, although Marina, who is now learning to drive, is talking about getting a part-time job to pay for gas. She is also taking about volunteering at summer camp this year which could grow into a camp counsellor's job next year.

According to the home economists, it costs $1,175 to pay for a basic year of recreation, reading, gifts and school needs for a girl of 16. On top of that, Marina has dance and guitar lessons, tutoring for math and French, and school band expenses, which have included trips to Banff and Powell River in the past year. She recently dropped piano because she was too busy.

For a 14-year-old girl, recreation and school needs are pegged at $1,021. On top of that, Tara has dance and guitar lessons, including playing in a combo band on Saturdays.

The same $1,021 is allocated for a 12-year-old but Julia also has dance, piano and voice lessons, and math tutoring three times a week.

A 10-year-old boy's recreation and school needs are pegged at $1,065 but Thomas has three sports -- soccer, lacrosse and in-line hockey -- and until recently was receiving private oboe lessons.

"A lot of people might say their lives are too busy but they have all made their own choices, and if they want to be in music and dance, as opposed to doing nothing after school, I'd rather have that," Patti Smyth says.

"The house has always got some positive noise to it and some enjoyment, as opposed to the constant sound of a TV. The benefit is that they are well-rounded, they are happy, they are doing what they like and they have made lots of friends.

"The benefits definitely outweigh the expense, although I keep telling them to hit the road with their music and then I can retire."

 HYPERLINK "mailto:mkane@png.canwest.com" mkane@png.canwest.com

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Vancouver Sun, Page F02, 17-May-2004

Air Canada agrees with six unions in bid to save carrier

By Paul Cross

TORONTO -- Talks continued Sunday as Air Canada and its unionized workers struggled to agree on how to save $200 million a year in labour costs.

Despite negotiating beyond Deutsche Bank's critical financing deadline, set for Saturday at midnight, Air Canada spokesman John Reber remained positive Sunday.

"It's true that it's past the deadline originally set, but we remain confident that we'll meet the conditions of the Deutsche Bank agreement and that's why the talks are continuing," Reber said.

Reber confirmed that negotiations continued Sunday with CUPE at Air Canada and two units of the Canadian Auto Workers -- one representing 6,900 Air Canada's customer service employees, and the other representing 1,400 customer and ground service workers at the subsidiary airline, Jazz.

"Progress is being made" Reber said.

By Sunday, agreements had already been reached with six of the nine bargaining units at Air Canada and its subsidiary Air Canada Jazz. Together, the nine union groups represent more than 30,000 workers.

But Gary Fane, CAW spokesman, said the union was far from making a deal that would satisfy Air Canada's customer service employees.

"We're happy to talk to them, but we're not close today. At this time we're off on a number of issues," he said.

"We're planning to stay today and tomorrow and ... as long as it takes to get the company to be logical and reasonable."

Fane declined to comment on the issues, but had been warning since Friday that his members would not agree to wage cuts.

Meanwhile, CUPE spokesman Alejandro Bravo said his union, representing 6,500 workers, was "feeling hopeful" and "working very hard" Sunday afternoon.

Reber would not elaborate on any of the discussions and was declining interviews, but said Air Canada would continue to issue statements as settlements were reached.

Intense bargaining all through Saturday had produced no word of new agreements, but very early Sunday morning, the announcements started coming.

The Air Canada Pilots Association, representing 3,300 pilots, announced it had reached an agreement "after two weeks of intense negotiations."

Minutes later, Air Canada announced it had come to terms with the largest of the groups, the International Association of Machinists and Aerospace Workers. The IAMAW represents 11,500 technical operations and ground service workers including aircraft fuellers, baggage handlers, finance and clerical workers.

Also early Sunday, Air Canada announced the Canadian Air Line Dispatchers Association had agreed to terms for the airline's dispatchers.

By mid-morning on Sunday, Air Canada Jazz was announcing agreements with its own 50 members of CALDA, and with Teamsters Canada representing 600 flight attendants.

On Friday, the unit representing 1,000 pilots at Jazz reached a tentative agreement.

Ron Fontaine, a spokesman for the IAMAW, said Sunday workers have done their share for the airline, and called on the federal government to come to the table.

Fontaine said the federal tax on jet fuel should be reduced.

"In Canada, it's four cents per litre, where in the US it's four cents per gallon" he said. "When you look at ... the cost of fuel being one-third of the basic cost of running an airline, that's significant."

Fontaine said the fuel tax is a serious issue for any Canadian-based air carrier trying to compete with carriers from the U.S.

"If the government wants to have a positive impact on the industry, that's where they could do it."

He also called for rollbacks in "double-digit" increases in airport rents and navigation service fees faced by airlines.

In addition to cost-cutting agreements with the bargaining units, the conditions under which Deutsche Bank had agreed to underwrite an $850-million share offering for the airline included an agreement on paying down the airline's $1.2-billion pension shortfall. The pension issue was resolved Friday, with the Office of the Superintendent of Financial Institutions asking Finance Minister Ralph Goodale to approve a 10-year repayment.

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The Province, Page A15, 17-May-2004

No election called yet, but candidates off and running

By Rob Shaw

Achilla Isaiah answered his doorbell on East 26th Avenue yesterday with the wary expression of a man wondering if he's about to be sold a vacuum cleaner or a Bible.

Instead, the 34-year-old from South Africa found himself talking to a pamphlet-waving Ian Waddell, the federal NDP candidate for Vancouver-Kingsway.

"I don't know if you know me, but I've represented this area before . . . I'm hoping to represent it again," said Waddell, 61, a former provincial cabinet minister and three-time Vancouver-Kingsway MP.

Prime Minister Paul Martin is expected to call a federal election for June 28 and across B.C. yesterday, federal candidates were hitting the streets.

"It's a Canadian trait, people are usually pretty polite," said Mary Pynenburg, 47, the Liberal candidate for Burnaby-New Westminster, who spent yesterday ringing doorbells.

"We've had a few close encounters with dogs, but other than that I've only ever had a few people who are visibly angry."

Don Bell, 62, the Liberal in North Vancouver, held the first rally at his Lonsdale Quay office yesterday.

"This looks to be as though the call will be next week," said Bell, mayor of the District of North Vancouver. "We're ready with the campaign office now."

Former B.C. premier Ujjal Dosanjh, Liberal candidate in Vancouver South, took the day off to recover from a fundraising party that went until 1:30 a.m. The $100-a-plate fund-raiser brought in $120,000.

He said he's been doing some old-fashioned knocking.

"Most people, at first, they don't recognize me," said Dosanjh. "It takes them a split second to recognize me and then I get a big smile."

In Surrey, Russ Hiebert, Conservative candidate for South Surrey-White Rock-Cloverdale, spent the day schmoozing at the Semiahmoo Fish and Game Club's pancake breakfast and White Rock RCMP open house.

"I think people have been hearing about the election for a while now," said Hiebert, 35. "They know its on the horizon, they're not so surprised when a candidate comes calling."

Back on East 26th, a cheery Waddell had dissolved any apprehension Achilla Isaiah might have had when he opened his door.

"I've read about you in the papers," said Isaiah. "This is an NDP household."

Mission accomplished for Waddell.

There were handshakes and a voting promise exchanged. Then Waddell went to the next house.

"It shows how mature the political process here is," said Isaiah. "I don't mind being bothered."

 HYPERLINK "mailto:rshaw@png.canwest.com" rshaw@png.canwest.com

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The Province, Page A19, 17-May-2004

Designer calling on professional artists to boycott Olympic contest

By Pia Guerra

Matthew Warburton, former president of the Society of Graphic Designers of Canada, has called for a boycott of the Olympic logo design contest. He says such work should go through design firms and not to the general public because such contests "demean the profession and make it seem like anybody can do it."

There are many talented, hard-working freelance artists across Canada not affiliated with design firms (or the SGDC) who would love a shot at submitting their work for consideration.

To say that the "top, most qualified designers across Canada" can only be SGDC-approved is an insult.

To ask the public to shell out hundreds of thousands of dollars to go through a process of short-listing private companies to make paid presentations is also an insult.

You'd think after the recent sponsorship scandals in Ottawa we'd know better. Let the contest, as in the spirit of the Games themselves, be open to all.

And let the best artist win.

Pia Guerra,

Vancouver

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The Province, Page A18, 17-May-2004

In other words: Nine steps to top health care

The health care debate in Canada is so overlaid with politics that effective solutions are smothered. To improve the health of Canadians we must:

- Modernize the Canada Health Act so that all Canadians have access to quality health care for essential services in a timely fashion. In this system, any Canadian would have the option to purchase services in the private system. Those who access the private system will be freeing up space in the public system without removing resources.

- Introduce a system of accountability for patient and provider by each receiving a printout of the cost of services used/given.

- Allow provinces to institute a system of medical savings accounts.

- Implement prevention models that have proven to work for medical problems such as obesity, foetal alcohol syndrome, cardiovascular problems, malignancies and social problems such as criminal behaviour, unemployment, teen pregnancies, dropping out of school and drug use.

- Better utilize information technology and telemedicine.

- Increase the number of students entering health programs. Devise an incentive program that pays the tuition fees for a number of medical students, nurses, etc., in return for an equal number of years working in an under-serviced area.

- Control costs by involving the sharing of best practices amongst physicians. Utilizing information technology to monitor prescribing habits and drug use will help to reduce poly-pharmaceutical abuse.

- Develop a national strategy on mental health and on seniors' issues for housing, wellness, and tax issues that will enable people to stay at home to care for sick family members.

- Reform our pension systems to save the CPP, OAS and the GIS.

Implementation of these solutions will improve the health of Canadians and prevent the rupture of our public health care system.

-- Dr. Keith Martin is Independent MP for Esquimalt-Juan de Fuca.

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Times Colonist (Victoria), Page A06, 17-May-2004

It's time to give voters fixed federal election dates

By Charles Gordon

Winnipeg gets a health centre. Ottawa gets big federal cash for light rail. Halifax gets a harbour cleanup. Quebec gets a highway. Toronto and Vancouver get big money for mass transit. Tra la.

Yes, it's the election song, heard from time to time whenever the party in power decides to do the right thing for the wrong reasons.

Thanks for the money, by the way.

Looking beyond it, scanning the horizon behind the growing piles of politically inspired regional booty, it is possible to see that the main argument against fixed election dates no longer works.

The main argument against fixed election dates was that the period leading up to them would involve non-stop political grandstanding. In fact, what we are seeing is non-stop political grandstanding anyway.

Moving to a fixed election date would level the playing field, give the opposition parties a chance to increase their non-stop political grandstanding. Right now, the government, which knows the election date, is in a far stronger grandstanding position.

This may not be exactly what Prime Minister Paul Martin refers to when he speaks of a democratic deficit, but it should be thought of that way.

The government can call unnecessary elections merely because it sees a chance to win them. That was the case with the Liberals in 1997 and 2000, both called with the government in a majority position and having served less than four years.

The government can also delay necessary elections because it thinks it may lose. That was the case with the Trudeau Liberals in 1979 and the Mulroney Conservatives in 1993. Add a couple of more scandal stories and it could be the case with the Martin Liberals in 2004.

Anybody for 2005?

Fixed election dates would, um, fix that. The government couldn't call snap elections for its own convenience. It couldn't delay elections past four years. Yes, there would be the phenomenon known in the U.S. as an "election year," but we have that already. If this doesn't feel like an election year to you, you're spending too much time watching TSN. With a fixed election date, it becomes an election year for everyone, not just the government.

The advantages of incumbency are considerable and well-documented. The government sets the news agenda and can time its announcements to maximum advantage. In all but the most exceptional circumstances, it enters every election campaign with a head start. That head start lengthens when the government also controls the timing of the election.

One factor and only one factor matters when choosing an election date: can the government win? If it can, then it does not matter, say, that one province is underwater, as Manitoba was in 1997. It does not matter if university students have scattered for the year, as will be the case this year.

And it especially does not matter if one of the opposition parties has a new leader who is unfamiliar to the public. Quite the contrary. In 2000, the Liberals took advantage of the new Canadian Alliance leader, Stockwell Day. He was so new to the job that the public could not know him. The same strategy appears to be directed this year at the new Conservative leader, Stephen Harper. In the absence of public familiarity with Harper, the Liberals hope that they can define him in the public mind, as they did with Day four years ago.

For voters, that is the reverse of what should happen, and voters are what elections should be about. From the point of view of the voters, the ideal election takes place after a new party leader, or a new prime minister, has been in office for some time, at least a year. That way, the voters can develop a sense of the new government's purpose and performance or the new opposition leader's competence and ideas.

For a new government, calling a snap election defeats that purpose. Calling a snap election to catch a new opposition unprepared is unfair to the voters as well as the parties.

The time to call an election is when everyone is prepared, including the voters. That means a fixed date.

Traditionalists who oppose the idea say it is inconsistent with our parliamentary system and that it will somehow "Americanize" our politics. To take the last first, our politics is fairly well Americanized already, and it is difficult to see how fixing election dates will make it more so.

As for the parliamentary system, the important aspect of it that we must keep is the provision that the government must resign, causing an election, if it loses a confidence vote in the House. If we keep that, but deny the government the right to call an election whenever it fells like it, we will do away with a large component of the democratic deficit in Canada.

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Times Colonist (Victoria), Page A07, 17-May-2004

United, municipalities will prosper; divided, they cannot survive

By Maurine Karagianis

On the thorny issue of amalgamation, hats off to Victoria for pushing the issue in the context of housing and federal funding. If it takes growing concerns about the homeless and affordable housing to move us into the 21st century, then all the better.

As the Capital Regional District arts chair, I recognize the frustration that our municipal "diversity" causes with federal grants. The CRD arts committee was created to show regional support for arts organizations that were being left out of federal funding programs because only four of 13 municipalities supported them.

Although at the end of the process the funding remains much the same, the support of the CRD carries bigger clout and increases the chances of leveraging more national dollars. So, I say, let's wade right into the discussion on amalgamation.

Our individual municipalities can no longer ignore the growing pressures to maintain services, keep taxes low and plan for future crises like homelessness and poverty without seriously expanding our current co-operative relationships.

The CRD has been unable to achieve its full promise of addressing the growing demand for inter-municipal co-operation. It has worked well for sewage and garbage but has fallen woefully short in addressing most of the other social, environmental and economic issues looming over us.

Let's look, for example, at fire protection. We have as many as four municipalities preparing to invest huge tax dollars in pumper or ladder trucks. While it would be nice to have a pumper truck on every block, with only 300,000 residents in the Capital Region, does it make sense for every community to purchase one? Communities like Esquimalt (population 17,000) are laying out enormous tax revenues on the same item that our neighbouring municipality is purchasing.

How can we expect to survive, let alone provide the services and safety provisions our community deserves, to fund services like fire protection at competitive levels, as a stand-alone municipality?

Add to this ever-increasing downloading from senior governments, including abandonment of funding for social service programs, and it's evident the poor beleaguered property tax will not suffice.

Local government must show some true leadership and initiate intelligent, practical and sensible debate on how we can band together. We must find better ways to run our municipalities than relying on the taxpayer to bear the growing burden. And adding more taxes to the cost of housing just moves us further and further away from ever being able to provide affordable housing for anyone.

If, as some might say, the word amalgamation is too controversial, then let's call it integration or collaboration.

But, whatever we call it, let's move forward with a cohesive strategy to join forces. It makes a lot of sense.

Maurine Karagianis is an Esquimalt councillor.

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Times Colonist (Victoria), Page B01, 17-May-2004

Charting a course over urban scrawl

By Norman Gidney

The metal boxes clamped to lamp standards on downtown street corners used to attract stickers and graffiti. Now they help tourists find their way.

The cases that house controls for traffic lights have been adorned with colourful maps and "you are here" arrows.

The dual-purpose graphics help lost visitors and -- thanks to a slippery, clear anti-graffiti coating -- deter "taggers." Several dozen utility boxes downtown have been covered with the street maps.

Factory Print Shop, a spinoff business of the Rock Solid Foundation, did the work at its Esquimalt Road premises and installed the maps, said operations manager Kim Coyle.

"It's a great concept and it looks good," she said. If the maps do get tagged by felt pen or grease pencil, "all they need is a good wipe."

The city of Victoria supplied the colour base map showing streets and major buildings. Factory Print Shop designer Reuben Hall, a former graffiti artist who grew up in Esquimalt and took design courses, manipulated and customized an enlarged section for each specific site.

Lise Pronovost grew up in Hull, Que., and helped out at her father's silkscreening shop. She does much of the map installation work. Each one can take 45 minutes to an hour.

"There are locks and hinges on the boxes and you have to work around it," she said.

"It's a neat idea. It's working out really well," said Emmet McCusker, the city's supervisor of traffic signals.

So far, 42 boxes have been transformed. Victoria has a total of 118 intersections with traffic lights and pedestrian signs controlled by electronics in similar boxes.

McCusker said Victoria hopes to do something similar on the other 76 boxes. Maybe those at intersections near schools could feature artwork by students, he said.

The production cost is about $80 per box and it's been a worthwhile expense, said McCusker.

Previously, the boxes were painted a uniform pale grey, providing a perfect canvas for graffiti scribblers.

Graffiti still get scrawled on them, but are much less visible against the colourful high-contrast background.

The city's full-time graffiti cleanup staffer won't be out of a job anytime soon, but the new more easily-cleaned utility box coverings have allowed him to get to more sites in a day.

"We're doing a better job of it," said McCusker.

"If you take them down two times, three times, they get the message."

The city has other downtown fixtures that could benefit from a similar custom covering, such as power kiosks.

Telus and Canada Post have used similar colourful graphics developed by Factory Print Shop. Thirteen mail boxes and relay boxes for letter carriers have bright stamp-related graphics, and eight Telus street-level cabinets have been done over.

Each phone box has a unique design, a piece of art created by an Esquimalt student. Telus got a pile of art to review and made the final picks.

McCusker likes the project because Factory Print Shop's earnings support the youth programs and anti-violence work of Rock Solid.

The sign business started when Rock Solid acquired the computer graphics and sign-printing equipment to mount the Trackside Art Gallery on the back walls of warehouses along the E&N Railway.

Once thick with graffiti, the walls now sport billboard-sized original artworks. TAG debuted two years ago and will add 16 more pieces by local youths and professionals in September.

Factory Print's aim is to be one of the foundation stones of Rock Solid's "social enterprise," which has an ambitious business plan to create 300 jobs for youths over the next seven years.

 HYPERLINK "mailto:ngidney@tc.canwest.com" ngidney@tc.canwest.com

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Times Colonist (Victoria), Page B01, 17-May-2004

Environmentalism key issue for new lobby group

By Judith Lavoie

A newly formed political arm of B.C.'s environmental movement is hoping to shape B.C.'s next government.

The Conservation Voters of B.C., a non-partisan group, will be quizzing prospective candidates about their environmental views, checking on voting records and then throwing their weight behind the candidate who they believe will best reflect environmental values.

The Conservation Voters is being modeled on the League of Conservation Voters in the U.S. -- an organization which claims an 80 per cent success rate in getting its chosen candidates elected.

Matt Price, Conservation Voters co-ordinator, said the group will pick its battles carefully for the provincial election next year and will be looking for ridings where the vote could go either way.

The board, made up of community volunteers and people who have been involved in the environmental movement, will then look at the prospective candidates and make a choice.

"Places like Oak Bay-Gordon Head are very interesting to us because they could go either way," he said.

The emphasis will be on looking at the candidates, not the parties, and Price expects that some of those they choose to support will be Liberals, despite the doubtful environmental record of the Liberal government.

The group will be looking for candidates who can win, and, in some cases, that will mean not supporting traditional environmental candidates like Greens, he said.

When someone has already held office, the Conservation Voters will check Hansard for signs of environmental awareness and, if the candidate has not held office previously, volunteer activities and community work will be taken into account. "We know we have to be systematic, credible and fair," Price said.

Once a candidate gets the Conservation Voters endorsement the group will throw the efforts of its volunteers into the campaign. And the involvement will not end with the election.

"Between elections we will be sitting down with the politicians and saying, 'We are still doing outreach to your constituents.' We are looking for accountability," Price said.

Most environmental organizations cannot be active politically or they risk losing their charitable status. The Conservation Voters, which is already incorporated, is a non-profit society, but will not seek charitable status. That means the group will be looking for donations, but will not give tax receipts.

One aim of the Conservation Voters will be to stop wild pendulum swings.

"One party passes laws and the next one undoes them. Is that progress?" Price asked. "We need to break the cycle by having all parties raise their environmental performance and that will happen with getting strong candidates elected."

Green Party leader Adriane Carr said she applauds the focus on environmental issues and trying to get good candidates elected.

But, Carr hopes the group acknowledges that there are ridings where Green candidates are electable.

The Conservation Voters will be officially launched Thursday evening at an event at the Alix Goolden Hall, 907 Pandora Ave., when Elizabeth May, executive director of the Sierra Club of Canada will team up with comedian Todd Butler.

 HYPERLINK "mailto:jlavoie@tc.canwest.com" jlavoie@tc.canwest.com

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Globe and Mail, Page A13, 17-May-2004

Contempt, stupidity, or good old patronage?

By Lysiane Gagnon

Nobody likes to be taken for an imbecile. It is precisely because the federal Liberals treated Quebeckers like imbeciles that the sponsorship scandal is having such a lasting impact on Quebec voters.

While the Liberal Party seems to be more or less recovering from the scandal in the rest of Canada, the party still is in dire straits in Quebec.

Let's forget for one minute the financial aspect of the sponsorship scandal, the alleged frauds, the patronage and the squandering of public money through a secret slush fund.

This would be enough to anger any citizen but in Quebec there is an additional factor at play.

The revelations about the sponsorship affair blatantly exposed the contempt in which the Chretien government held the Quebec francophones. The government acted as if it believed that Quebeckers were dumb and naive enough to be swayed by the mere sight of Maple Leaf flags and ads with the Canada logo - as if this simplistic propaganda could be enough to thwart sovereigntist aspirations.

So first there is this angry feeling of having been treated like morons, to borrow a word from the lexicon of one of Mr. Chretien's press secretaries. The sponsorship scandal also had another effect. It reawakened the frustrations of the Yes voters of the 1995 referendum.

Because they were defeated by a razor-thin margin, many suspected that somehow they had been robbed of a victory by some unspeakable trick of the federal government. This suspicion, as well as the anger, waned over the years; six months ago, only the diehard secessionists were still mulling over the referendum defeat. People wanted to turn the page, and as recently as last winter, polls were showing that the Martin troops could actually sweep away the province; some were even predicting that the upcoming election would mark the beginning of the end of the Bloc Quebecois.

Then the sponsorship scandal erupted. And Quebeckers learned about the secret unity fund aimed at battling Quebec "separatists" - a secret fund that over the years totalled almost $800-million and that was liberally used during the referendum campaign, thus bypassing the Quebec law that limited the expenses of both the Yes and the No camp.

So there it was! hissed the Yes voters: "While we played by the rules, the Ottawa Liberals shamelessly inundated the province with costly propaganda material."

This led to a resurgence of the nationalist sentiment from which the Bloc Quebecois naturally benefited.

Now it is quite possible that Mr. Chretien and the operators in charge of the "national unity" file did not really despise Quebeckers. They might have been inspired instead by sheer stupidity - a possibility that cannot be discounted, since there is no other way of explaining why the larger portion of the discretionary fund was spent after the referendum, rather than before.

In the years following the referendum, support for sovereignty fell and Lucien Bouchard, the great hero of the referendum campaign, was busy reducing the province's deficit. In other words, it is precisely when the separatist threat was at its lowest that the Chretien government spent most furiously in Quebec in the name of national unity.

This leads to another hypothesis. Far from being stupid, the Liberals might have been shrewdly using the noble cover of national unity to hand out handsome contracts to the friendly advertising agencies whose "free" services they would need for the 1997 and 2000 elections.

So it boils down to a choice between contempt, stupidity and good old patronage.

 HYPERLINK "mailto:Lgagnon@lapresse.ca" Lgagnon@lapresse.ca

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Globe and Mail, Page A13, 17-May-2004

Forget crocodile tears - the West has reason to weep

By Norman Spector

If, as promised, Paul Martin is serious about reducing British Columbians' alienation - a big if - you'd have to say he's not off to a good start.

It's not so much that parachuting "star" candidates contradicts another promise: that Mr. Martin wouldn't do politics the same way the "friendly dictator," Jean Chretien, did. Though a bit soggier than other Canadians, we British Columbians are sophisticated enough to understand that all Mr. Martin's talk about slaying the democratic deficit, though it's very, very important, is just that. Talk.

Nor do British Columbians give much credence to the allegations of racism levelled by Tony Kuo, the disappointed candidate for the Liberal nomination in the riding of Burnaby-Douglas. You can say many negative things about the Liberal Party (and I've said most), but Mr. Martin's decision to appoint backroom boy Bill Cunningham was not due to the colour of the Cunningham skin. What sort of MP would Mr. Kuo be, given his penchant for gestures like holding up a bag of empty Kleenex boxes to illustrate the tears he claims his visible minority supporters have shed?

What irks British Columbians is the sense we are a sideshow in the game of spin being played in the national media.

Out here, the Martin team has been criticized for mass membership signups in universities and ethnic communities - with the odd dead dog thrown in - to seize control of the Liberal Party and overthrow Jean Chretien.

But rough tactics are also preferred by Mr. Kuo and others, who've been battling for nominations. Last Sunday, Mr. Kuo appeared on CTV and, next to tears, said it was a "sad day for Canadian politics." On Monday, he told Global's Kevin Newman that the Prime Minister was "virtually killing democracy." And on Tuesday, Mr. Kuo sang the same tune for the CBC's Terry Milewski. Not a question was asked, nor an answer given, about why Mr. Kuo wanted to be a Member of Parliament or what he would do for British

Columbians.

The term "dream team," so often heard in the national media to describe Liberal candidates in B.C., is not on many lips in Vancouver. In Ontario, Ujjal Dosanjh may look like a former premier; out here, he's regarded as a Kim Campbell-like hiccup who took the provincial NDP to its worst drubbing ever - and a turncoat the New Democrats are determined to defeat.

Unlike the other parties, the B.C. Liberals have essentially been a patronage machine over the years with virtually no grassroots organization. What's new today is

that the shots are visibly being called from central casting in Ottawa, which is the only way a spin operation like Mr. Martin's can function.

With the Conservatives reunited, Mr. Martin goes into the election in a more precarious position than Mr. Chretien ever faced, which is why his team is preparing negative attack ads.

Out here in B.C., the Liberals are 10 points lower, and the NDP nearly 25 points higher than they were going into the 2000 election (as measured by Ipsos-Reid). Nationally, in the same poll, the Liberals are 12 points below the level of support they had on the eve of the 2000 election. Mr. Martin is still flirting with a minority government, especially since the incumbent party usually loses support during a campaign.

Pundits and pols who predicted a united party would not hold onto most of the centre-right vote have already been proved wrong; though the Conservatives go into the election four points behind where their two parties were in 2000, they are poised at last to make a major breakthrough in

Ontario.

In English-speaking Canada, the Grits are threatened by a reinvigorated NDP which, at 15 per cent in the polls, has double the support it had on the eve of the 2000 election. Moreover, NDP leader Jack Layton understands that attacking the Conservative leader - as his party did in the last campaign - would play into Liberal hands by sending frightened voters scurrying in their direction.

In Quebec, where the election has a distinct two-party flavour, the Liberals went into the last campaign 10 points ahead of the Bloc Quebecois, and Jean Chretien ended up winning the plurality of seats. Now, under Mr. Martin, the party is 15 points behind the Bloc, which, given the inefficiency of the anglophone vote, could mean a massive loss of seats.

 HYPERLINK "http://www.members.shaw.ca/nspector4" www.members.shaw.ca/nspector4

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Globe and Mail, Page A13, 17-May-2004

Whistleblowers: why they do it

By Antonio Gualtieri

The prominence of whistleblowers in Ottawa's advertising scandal raises questions about the moral imperatives that motivate individuals to embark on the costly and perilous course of whistle-blowing. Since I am by trade a comparative religionist, I shall focus on those moral demands that have strong connections with religious traditions. Let me isolate three principles.

Stewardship: By this I mean the responsible use of resources with which one has been entrusted. This is a recurrent theme in Christian tradition which draws, in turn, on the Hebrew scriptures: "The Earth is the Lord's and the fullness thereof. The world and those who dwell therein." (Psalm 24:1). Humans do not possess for their own purposes the bounty of the Earth. They are only stewards or trustees on behalf of God, morally obligated to use the Earth's abundance in conformity with God's good intentions.

How does this apply to governments, civil servants and financial dereliction? The sweat of the taxpayer's brow is entrusted to politicians and bureaucrats with the charge to spend it wisely and well for the common good. Is it too grandiloquent to say this is a high and noble calling? The way some observers have dismissed $100-million (or $13-million) of sponsorship mismanagement as peanuts in the context of the global budget suggests that we exaggerate; that we have set the bar too high. But those who operate as conscientious stewards of money that has been entrusted to them cannot sit so cavalierly to violations of that trust.

Witness: The moral meaning of witness is to testify to the truth one has seen. This is a pivotal principle in many religious traditions. The first pillar of Muslim faith is the Shahada or witness statement: "I bear witness that there is no God but God and that Mohammed is his Messenger." Those who have seen the truth of this are obliged to bear witness to it. The idea of witnessing to Jesus Christ runs through Christian tradition. An apostle is an eyewitness of the resurrection of Christ upon whom has been laid the burden of testifying to it. "You killed the author of life [Jesus] whom God raised from the dead. To this we are witnesses." (Acts 3:15).

Much Holocaust discussion has stressed the obligation to eschew silence and to bear witness to the genocidal experience of the Jewish people that unmasks optimistic pretensions about human benevolence. This insight is persuasive even to those of secularized consciousness. The universal theme is that human dignity and integrity demand bearing witness to the truth one has perceived - especially when one is ranged against powers and interests that want to hide the truth. In their humble way, those who expose stupidity and corruption, greed and falsehood, in the governance of their society stand in this moral tradition of steadfastly and courageously bearing witness to what they have seen.

Warning: Finally, I want to draw attention to the obligation whistleblowers feel to utter a warning against deformed and deviant institutions. This note of warning finds its religious precedents in the series of woe sayings uttered by Jesus against the religious authorities of his time, such as "Woe to you scribes and Pharisees, hypocrites! For you are like whitewashed tombs, which outwardly appear beautiful, but within they are full of dead men's bones and all uncleanness." (Matthew 23:27). A secularized contemporary version of condemnation directed against the elite of political institutions might be "Woe to you cabinet ministers and directors, hypocrites! Outwardly you profess honesty and fairness, but inwardly you are devious and self-serving, replacing public good by private and party gain." Muslims look on the Koran not only as a word of grace and guidance, but also as a warning about the judgment of the Last Day to those who deviate from the revealed way for social life.

If hypocritical, wasteful, failures of stewardship are not exposed and denounced, the long-term consequence is further deterioration of important social institutions by public despair and cynicism. Some whistleblowers are morally impelled to issue warnings, which if heeded, can lead to social and political renewal and the restoration of institutions to their rightful civilizing mission.

There is a disposition on the part of institutions of whatever sort - governmental, health, educational, ecclesiastical - to devote much of their energy, not to original purposes, but to self-perpetuation and self-aggrandizement.

This probably has a great deal to do with the ego and material needs of the institutional elite - but the consequence of this is the contempt in which these elites, whether they be bishops or deputy ministers, tend to hold those who challenge the customary ways of doing things and threaten their authority. Such disdain easily passes into irritation and anger, and a strategy to punish those who seek to expose wrongdoing.

This is why so many whistleblowers have suffered humiliation, calumny, firing, cessation of promotion, ill health and extinction of career.

Why then do they do it?

Some, at least, are driven by the moral demands of stewardship, witness and warning that will not allow them to do otherwise.

Antonio R. Gualtieri, professor emeritus of religion at Carleton University, is the father of Joanna Gualtieri, a lawyer with the Department of Foreign Affairs who spoke out about misuse of taxpayer money on diplomatic accommodations and has since been on unpaid leave.

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Globe and Mail, Page A06, 17-May-2004

Alberta doubles spending on government advertising

Edmonton

The cost of communicating with Albertans is growing by leaps and bounds.

The Alberta government spent $7.3-million in advertising in 2002-03 - nearly double the $4-million spent the previous year.

Last year, the Alberta government spent $230,000 in advertising to promote its own budget. This year, it spent $400,000 on a campaign condemning the Canadian Wheat Board. CP

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Globe and Mail, Page A06, 17-May-2004

Key aide gave direction in scandal, MP says

Ottawa

A backbench Liberal MP says he is convinced that a key aide to former prime minister Jean Chretien gave political direction in the sponsorship scandal.

Speaking on CTV's Question Period yesterday, Walter Lastewka, MP for St. Catharines, said Jean Pelletier, former Chretien chief of staff, said as much in testimony before the Commons public-accounts committee.

The MP said Mr. Pelletier told the committee that he worked with Chuck Guite, the bureaucrat who ran the sponsorship program and who has been charged with fraud by the RCMP. Mr. Lastewka said Mr. Pelletier also pointed to the office of former public works minister Alfonso Gagliano.

Mr. Lastewka said the committee has been told enough to write an interim report.

Liberal MPs voted last week to end the committee's work after almost three months. CP

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Globe and Mail, Page B03, 17-May-2004

New national regulator topic of meeting

By Sinclair Stewart

Some of the biggest names on Bay Street are huddling with the Ontario government today to discuss ways of creating a national securities regulator, a sign that Corporate Canada may begin to play a more active role in reforming the country's fractured regulatory structure.

The luncheon meeting was put together by Management Board chairman Gerry Phillips, the minister responsible for the Ontario Securities Commission, who has been trying to persuade other provinces to cast aside their differences and support the formation of a single national securities watchdog.

Much of the debate around this issue has been confined to sniping between a handful of provincial commissions, particularly Ontario, British Columbia and Quebec. There has also been friction between the provincial governments and Ottawa over how to move forward on the issue.

Key business leaders have recently begun to speak out on the need for a central regulatory agency, but until today's gathering, these have been mainly isolated events.

The luncheon is expected to include Toronto-Dominion Bank chief executive officer Ed Clark, Scotia Capital Inc. chairman David Wilson, RBC Dominion Securities Inc. chairman Tony Fell, and Toronto Stock Exchange CEO Barbara Stymiest. Bob Bertram, executive vice-president of the Ontario Teachers Pension Plan Board, has been invited, as has CPP Investment Board CEO John MacNaughton and corporate lawyer Purdy Crawford, who headed up the Ontario government's Five-Year Review Committee that published a number of recommendations for regulatory improvements.

Sources describe the meeting as a brainstorming session, where senior business executives can share ideas and discuss possible solutions with government officials.

The Ontario government and the OSC have been leading the push to dissolve Canada's 13 provincial and territorial securities commissions into one unified regulator. The argument is that this would eliminate unnecessary red tape, make it easier for companies to comply with rules in different provinces, and cut costs for public issuers. Just as importantly, say proponents, it would give Canada a single voice on the international stage when dealing with foreign regulators.

Other provinces, however, are dubious of the benefits, and there is suspicion that a "superagency" would really be little more than a beefed-up Ontario commission. British Columbia has said it fears a national commission would not be sensitive to regional needs. Quebec has echoed that, signalling it wants no part of a federally run regulator.

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Globe and Mail, Page B01, 17-May-2004

No merger guidelines for banks until fall: Goodale

By Sinclair Stewart

Finance Minister Ralph Goodale has privately told Canada's banks that Ottawa won't publish its eagerly awaited revised merger guidelines before the fall, almost certainly ending any prospect of a blockbuster deal this year.

Mr. Goodale telephoned chief executive officers at a handful of the country's largest banks late last week, and explained that he would be unable to release the much anticipated report because of the looming federal election, according to sources.

The Finance Minister hinted publicly last week that there could be a delay, and The Globe and Mail reported he would likely announce a new time frame shortly after the election.

Originally, he had promised to stick to a June 30 timetable put in place by his predecessor, former finance minister John Manley. But the deadline was clearly in jeopardy as soon as it became apparent that Canadians would probably head to the polls on June 28.

One bank CEO told Mr. Goodale that he understood the reason for postponing the report, but at the same time reiterated that the financial services industry sorely needs clarity on consolidation, specifically on the ambiguous public interest test that Ottawa applies to bank mergers. The conversation was brief but "cordial," said one source familiar with the matter.

Another banker, speaking on condition of anonymity, said the industry would prefer to wait a few extra months for a considered approach to mergers, rather than have Ottawa rush something out two days after an election, and risk politicizing the process.

Mr. Goodale said recently that he is aware of the issues facing the banking sector, and the need for clarification on the merger process. Many industry watchers believe the uncertainty about domestic mergers has effectively paralyzed the banks, and prevented them from pursuing larger acquisitions in the United States.

Under the previous timetable, banks would not be allowed to bring merger proposals to Ottawa until the end of September. After that, there would be a 60-day window during which other banks could bring forward competing proposals.

But with updated guidelines not expected until the fall, it is unlikely banks will be pitching deals before year-end, even if the government does eventually give the green light to consolidation.

There has been considerable speculation that the federal government would attribute the delay to the need to study so-called "cross-pillar" mergers between banks and insurers. All of the major banks support the idea of allowing such deals, which are currently prohibited by Ottawa.

Toronto-based Manulife Financial Corp., however, is the only major insurer lobbying for the ban to be removed. Rivals Sun Life Financial Inc. of Toronto and Great-West Lifeco Inc. of Winnipeg have both urged the government to keep restrictions in place.

Manulife, which recently swallowed Boston insurer John Hancock Financial Services Inc. in an $18-billion deal that made it the largest company by market capitalization in Canada, is widely regarded as a likely acquirer if cross-pillar mergers are allowed. Manulife discussed a possible combination with Canadian Imperial Bank of Commerce in 2002, but the talks dissolved after Ottawa signalled it was not about to change its stance.

Merger policy has been effectively up in the air since late 1998, when Paul Martin, then the finance minister, quashed proposed unions between Royal Bank of Canada and Bank Montreal, and between Toronto-Dominion Bank and CIBC.

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Globe and Mail, Page B10, 17-May-2004

Mining sector powers jump in profits

By Carolyn Leitch And Diana Clifford

China's voracious appetite for Canada's raw materials helped to push corporate profits higher in the first quarter, but sectors across the economy saw their results dragged down by the strong dollar.

According to a Report on Business survey of 284 Canadian companies, first-quarter profits rose a solid 9 per cent from the same period last year. Companies in the survey tallied a collective profit of $14.4-billion, up from $13.3-billion in the first quarter of 2003.

Douglas Porter, senior economist at BMO Nesbitt Burns Inc., said company profits in this year's first quarter were solid as China, the United States and Japan all consumed great amounts of metals, steel, lumber, fuel and equipment in their industrial expansion.

"Over all, the industrial world has obviously turned the corner."

Canada's big companies had a tough act to follow after posting a dramatic 157-per-cent surge in year-over-year profits in last year's first quarter.

Mr. Porter added that Canada's economy posted a sluggish performance in the first quarter compared with the heated pace of U.S. expansion. He estimated that Canada's gross domestic product rose by 1.8 per cent at an annualized clip in the first quarter.

Mr. Porter said the first quarter was also notable because it marked the first time in two years that profit growth at corporations in the S&P/TSX 60 index of blue-chip companies lagged the surging profit growth of U.S. corporations in the Standard & Poor's 500-stock index.

Market watchers estimate that S&P 500 companies saw collective profit growth near the 20-per-cent mark in the first quarter.

Looking at specific sectors, Canadian companies saw a wide range of first-quarter results.

Mining companies were the big winners as metals prices soared. Companies in the integrated mines group saw profit rocket ahead 1,448 per cent to $1.13-billion from $73-million in the first three months of 2003.

"We are experiencing the best fundamentals the base metals industry has seen for more than a decade," Derek Pannell, Noranda Inc.'s president and chief executive officer, said in a statement when the company reported first-quarter numbers last month.

Toronto-based Noranda, which produces copper, nickel, zinc and aluminum, posted a profit of $201-million - a sharp turnaround from the $61.5-million loss the miner reported in the same period last year.

(For survey purposes, results of companies such as Noranda that report in U.S. dollars have been converted to Canadian dollars.)

Inco Ltd. said it is on track to hit its highest annual nickel production in nearly 30 years as demand continues to climb. Inco's first-quarter profit jumped to $336.3-million from $43-million in the same period of 2003.

Teck Cominco Ltd.'s profit swelled to $96-million in the three months ended March 31 from $5-million for the first quarter of 2003. Teck said its substantially higher profit was mainly a result of higher copper and zinc prices.

During the quarter, average copper prices were up 65 per cent from the previous year, nickel prices were up by more than 75 per cent and zinc prices jumped by 35 per cent.

Montreal-based aluminum giant Alcan Inc. swung to a first-quarter profit of $139.8-million from a loss of $40.8-million a year earlier.

The company's first-quarter results were the first to incorporate results from former French competitor Pechiney SA, which Alcan acquired in a takeover last year.

While acquisitions boosted Alcan's sales and profits, higher commodity prices and the stronger euro also bolstered results for the mining sector.

Mr. Porter said that profits for the country's metals producers would have been even fatter if it weren't for the tail end of a massive upswing in the Canadian dollar.

Steel companies also saw heavy demand for their products as the global economy roared. As a group, steel companies enjoyed a profit rise of 434 per cent in the first three months of the year from the same period last year.

"We saw steel prices take off like a scalded cat in the first quarter," Mr. Porter said.

Energy prices were also on a tear, but the strong dollar took a toll on oil and gas producers, whose profits fell 55 per cent from last year's eye-popping first quarter.

Canada's largest petroleum company, EnCana Corp., reported a 70-per-cent decline in first-quarter profit to $381-million from $1.3-billion a year earlier. The company took a large writedown in the first quarter in keeping with new accounting rules governing price-hedging strategies.

Integrated energy giant Imperial Oil Ltd. said the Canadian dollar, which was 15 per cent higher in this year's first quarter than in the same period in 2003, lopped off its profit in the quarter.

Broadcasting and cable companies saw their collective results slide into the red in the first quarter from the same period in 2003. Companies in the biotechnology and pharmaceuticals group reported collective profits 35 per cent lower than a year earlier.

Mr. Porter noted that many of the drivers of first-quarter results have already changed direction in the second quarter. The Canadian dollar has retreated, he said, and China's runaway growth has lost some steam.

With the U.S. economy still strong, the economist is optimistic that the Canadian economic landscape is in line to benefit in the second quarter and the remainder of 2004.

Who's hot by sector

First quarter

Oil and gas producers

2003: $2.9 billion

2004: $1.3 billion

Integrated mines

2003: $73 million

2004: $1.1 billion

Booming

TSX share price and earnings

Inco, N-TSX

Profit ($U.S.)

2004: $255 million

2003: $33 million

Dofasco, DFS-TSX

2004: $54.6 million

2003: $46.9 million

Who's not

Broadcasting

2003: $18.8 million

2004: $201.8 million

Biotechnology & pharmaceuticals

2003: $129 million

2004: $83.8 million

Bashed

Canwest, CGS.S-TSX

2004: ($211.3 million)

2003: $9.9 million

Biovail, BVF-TSX

2004: $21.1 million (U.S.)

2003: $57.6 million (U.S.)

First quarter earnings survey: 2004

Survey of 284 companies by sector, $million

Sector.......................Companies.... 2003...........2004... % change

NATURAL RESOURCES.......59..$5,419.8... $4,493.2... -17

Mining.................................23......382.7...... 1,453.5...+280

Integrated mines.......................8........73.0.......1,130.4... +1448

Metal mines............................4........20.3..........84.7... +319

Other mines............................4.......146.7..........14.2....-90

Precious metals........................7.......142.8.........224.1....+57

Energy.................................23.....4,706.2.......3,079.8.....-35

Integrated oils..........................4......1,696.0.......1,617.0.....-5

Oil and gas producers................13.....2,860.1.......1,274.2....-55

Oil and gas field services..............6.......150.0.........188.6...+26

Forestry................................13.......330.9.........(40.0).....nm

MANUFACTURING..............71......(189.7).......614.4....nm

Consumer products...................19........279.8........233.6....-16

Food processing........................4.........13.7.........36.8..+169

Household...............................1...........4.3..........3.5....-19

Clothing & textiles......................1...........0.5.........0.5....+17

Appliances...............................2...........1.4.........0.8.....-41

Biotechnology & pharmaceuticals.....6........129.0.......83.8....-35

Misc. consumer products...............5........131.0......108.2....-17

Industrial products......................52.......(469.5)....380.7.....nm

Steel......................................13.........20.4......108.9...+434

Metal fabrications and machinery......7..........9.1........31.3...+245

Transportation equipment...............4......1,029.1)....(424.5)...nm

Electrical & electronic..................4.........(44.6).......54.5....nm

Cement & concrete.....................1.........(13.7).....(19.3)....nm

Chemicals................................6...........132.9....160.0....+20

Packaging & containers................4............32.4......25.1.....-23

Computer software & processing......6...........87.4......97.5....+12

Automotive...............................7..........335.8.....347.4.....+3

SERVICES.......................... 135.......7,569.8....8,877.9...+17

Utilities.................................. 10..........885.4...1,065.0...+20

Gas & electrical..........................5..........252.1......246.4....-2

Telephone utilities........................5..........633.4.....818.6...+29

Commuinicatons & media..............18.........255.5......(11.2)...nm

Broadcasting..............................3...........18.8....(201.8)...nm

Cable...................................... 3............4.7......(48.2)...nm

Publishing & printing.....................5.........176.3.....150.3....-15

Telecommunications......................5..........34.8.......64.1...+84

Entertainment services...................2.........20.8.......24.4...+17

Merchandising............................29.......770.3......856.0...+11

Wholesale distributors................... 8........50.7.......65.0...+28

Food stores & services...................7........426.7.....450.8.....+6

Department stores........................5........164.0.....153.0......-7

Clothing stores.............................3.........(5.5).......5.5....nm

Specialty stores............................6.......134.4......181.8....+35

Finance....................................45.....5,149.3...6,472.5....+26

Banks....................................... 8......2,760.3...3,447.5...+25

Investment houses........................ 8........395.5......437.1...+11

Insurance................................... 4........966.4...1,220.6...+26

Finance, leasing & investment houses...6........348.0.....465.7... +34

Management & diversified............... 7........537.3.... 744.6... +39

Computer software & processing....... 6..........87.4..... 97.5... +12

Business services......................... 6... .......54.5.... 59.6..... +9

Real estate & development.............. 8... ......151.0... 146.6..... -3

Transportation............................ 11..........27.7.....(11.0)... nm

Pipeline..................................... 3.........227.6....244.0.....+7

Lodging......................................3..........95.7......84.8....-11

Agriculture................................. 3.........(34.4)....(16.9)....nm

Other services..............................5.........41.7.......48.1....+15

INCOME TRUSTS...................... 25.......545.3......512.6......-6

TOTAL................................... 284...13,257.9...14,400.6.....+9

Figures represent after tax profits or losses and preferred share dividends; U.S. dollar results converted to Canadian; first quarter may end in January, February or March; nm-not meaningful.

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Globe and Mail, Page B07, 17-May-2004

Water tension rising between Canada and U.S.

By Wendy Stueck

VANCOUVER

As if softwood lumber, wheat and border security weren't enough, add another item to the list of potential sore points between Canada and the United States: Water.

"Water issues between the U.S. and Canada are becoming increasingly central to our relations - and tensions are increasing," said Peter Gleick, co-founder and president of the Pacific Institute for Studies in Development, Environment and Security in Oakland, Calif.

A water specialist who has written widely on resource issues, Mr. Gleick said population growth on both sides of the border is putting more pressure on shared rivers and lakes. And water controversies, including deaths from E. coli-tainted water in Walkerton, Ont., and proposals in both countries to divert or store water, have raised public awareness.

"We realize increasingly that it's hard to touch one piece of the system without affecting another piece," he said. "Because of that, there is increased sensitivity to water policy actions on both sides of the border."

That sensitivity is evident across the country. In southeastern B.C., a coal mine proposal has raised worries about environmental effects and led to calls for governments to review a previous International Joint Commission decision.

A Canada-U.S. agency set up to handle boundary water disputes, the IJC in 1988 recommended against government approval of a proposed coal mine in the same region, the Flathead River basin.

This time around, critics say concerns flagged by the IJC nearly 20 years ago still exist and that no development should go ahead unless those issues are addressed.

As the coal issue heats up, the Canadian government has already asked the IJC to review North Dakota's plan to drain water from Devils Lake to stop repeated flooding, a proposal Manitoba fears could pollute the Red River and Lake Winnipeg. Also on the IJC agenda: the Milk and St. Mary rivers, bones of contention between Alberta and Montana. Montana contends it gets less than its fair share from the rivers. And some believe other long-simmering disputes, including the proposed Tulsequah Chief base metals mine in northeastern B.C., in a watershed that straddles B.C. and Alaska, should be put to the IJC for review.

Meanwhile, Canadian and U.S. officials have met concerning a standoff between the U.S. Environmental Protection Agency and mining company Teck Cominco Ltd.

Last year, the company and the EPA spent months working on a plan for assessment and possible remediation of decades' worth of pollution in Washington State's Lake Roosevelt, downstream from Teck's smelter in Trail, B.C.

Talks broke down in late 2003 over the EPA's insistence that it control the studies, a stance Teck Cominco read as an attempt to impose U.S. laws on a Canadian company. In a Jan. 8 diplomatic note to the U.S. Department of State, Canada said it was concerned that an October EPA order against Teck Cominco "may set an unfortunate precedent, by causing transboundary environmental liability cases to be initiated in both Canada and the United States."

Such water fights are unsurprising to Wendy Holm, a B.C.-based agrologist and North American free-trade agreement specialist who, in the 1990s, fought - unsuccessfully - to have water excluded from the treaty.

At that time, public debate focused on bulk fresh-water exports, an issue that raised the spectre of huge tankers siphoning the Great Lakes to ship water to parched parts of the United States.

That debate, she says, bypassed more important issues - including the impact of Alberta and B.C.'s booming oil and gas sector on groundwater and potential irrigation demands on Canadian water by U.S. interests.

Under the current treaty, she argues, American companies using water in Canada for domestic purposes - to run an oil sands operation, for example - have superior rights to water than Canadian citizens or companies.

Currently, Ms. Holm is co-ordinating a new campaign to have water excluded from the treaty by targeting those who could be most affected by a water shortage - farmers. She said she didn't know whether American authorities were yet aware of her campaign, but said she expects more Canadians to sign on to what she sees as a fight for sovereignty.

"Around the world, we're seeing an increasing argument between commodity and community, and where the rights of one ends and the other's begins," she said. "Water has to be the dividing line."

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Globe and Mail, Page A07, 17-May-2004

New federal health agency to be located in Winnipeg

By Helen Branswell

After weeks of political wrangling at the highest levels, federal politicians will formally announce today that Winnipeg will be the hub of a regionally dispersed agency with broad responsibility for public health.

Public Health Minister Carolyn Bennett, who fought to keep the agency's head office in Ottawa, will make the announcement in Manitoba's capital with the man who bested her in the argument - Treasury Board President Reg Alcock - by her side.

Related news conferences in Halifax, Toronto and Vancouver will announce satellite operations in those and other cities.

The collaborative centres, as they'll be called, will tap into expertise across the country and build the strong links that were missing last year during Toronto's SARS outbreak. Each will have a principal area of responsibility, such as environmental or aboriginal health.

Last year's SARS outbreak provided the impetus for the creation of a federal public health agency. Still, infectious disease control will only be part of its mandate. The agency will also head the fight against chronic diseases and take the lead role in emergency preparedness.

Ms. Bennett will confirm Frank Plummer, scientific director of the National Microbiology Laboratory - also in Winnipeg - as acting chief public health officer while a search is conducted to fill the post permanently.

Federal officials see Dr. Plummer as the logical person to step into the job at a crucial period while the new agency is taking shape. Ms. Bennett has said she wants the job filled by summer, but with the expected federal election and summer vacations posing as potential delays, that timetable may not be workable.

"You realistically could be looking at four to six months and are you going to wait until then before anything is done?" asked Donald Low, a leading infectious disease expert who was on the search committee that named Dr. Plummer scientific director for the national lab in 2000.

"I can guarantee you they will not have a head picked within the next four months, unless this is already decided on."

Preliminary work has already begun, with a search committee established and a head-hunting firm gathering names of prospective candidates.

Dr. Plummer's name has been put forward and he has made it clear he wants the job - wants it so much, in fact, that the inveterate smoker is giving up cigarettes with the help of nicotine patches.

A scientist with a world-class reputation earned by groundbreaking HIV/AIDS research in Kenya, Dr. Plummer acknowledges that it would send the wrong signal if Canada's chief proponent of health were a smoker.

"Oh yeah, for sure," he said. "I need to quit smoking. There's no question."

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Globe and Mail, Page A04, 17-May-2004

Liberals slam Tories over proposed tax cuts

By Jeff Sallot

OTTAWA

A Conservative election promise of big tax cuts inevitably will mean chopping important social programs for the poor, Liberals say.

In a preview of what is to come, Liberal and Conservatives argued about taxes and social programs yesterday as each party tried to paint the other as fiscally irresponsible.

The Conservative tax-cut plan got a premature debut on the weekend with leaked copies circulating in Ottawa before the party platform could be officially rolled out by Conservative Leader Stephen Harper.

The plan would reduce the personal income tax for most middle-income taxpayers - those making between $35,000 and $70,000 a year - to 16 per cent from the current rate of 22 per cent.

The Conservatives say this means taxpayers making $50,000 annually would see their taxes reduced by $1,000 when the plan is fully implemented in four years.

The party also promises to phase in a child tax deduction during the same period. The deduction would ultimately reach $2,000 for each child under age 16.

The leaked document also outlines the elimination of various corporate "subsidies" in favour of lower corporate taxes.

The Conservative document says the party would also get rid of the $12-per-ticket air-security tax and cut employment-insurance premiums in order to eliminate the surplus in the fund.

Conservative House Leader John Reynolds said party officials were caught off guard by the leak, but added the document is getting rave reviews from voters in his British Columbia constituency.

He said a Conservative government could make these tax cuts handily without running a budget deficit.

"We aren't going to waste money the way the Liberals have. . . . There are literally billions of dollars they've wasted."

His campaign workers "were happy as hell" when they learned of the tax-cut plan, Mr. Reynolds said in a telephone interview after attending several public events in his riding. "So the campaign is under way."

Prime Minister Paul Martin is not expected to officially call the election until later this week for a June 28 vote.

But with the Commons in recess, the party leaders are already on the hustings. Mr. Martin makes appearances today in Laval and Mirabel, Que. Mr. Harper is speaking in Winnipeg and Regina.

Liberal strategists say the Tory tax cuts will cost the treasury $32.3-billion when fully implemented in four years, money that will have to come from social programs.

"We don't doubt that they will implement this," said Pat Breton, the spokesman for Finance Minister Ralph Goodale.

The Tory numbers don't add up when considering that federal revenues are projected to increase 3 per cent annually, but costs of programs such as the old-age security payment and the guaranteed income supplement are increasing 4 to 5 per cent each year, Mr. Breton said.

The Tories are also committed to big increases in defence spending. "The trouble is where are they going to have to cut."

The Conservatives will have to take the money from social programs, such as old-age security payments or the guaranteed income supplement for poor pensioners, Mr. Breton said.

"As my boss says, I don't see how you're going to square the circle."

Mr. Goodale is expected to give a detailed critique of the leaked Tory platform later today.

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Globe and Mail, Page A01, 17-May-2004

America's new war on drugs targets Canadian pharmacists

By Shawna Richer

PORT ELGIN, N.B.

In the United States's new war on drugs, small-town Canadian pharmacists like David Byers are the ones caught in the crossfire.

The New Brunswick pharmacy owner is one of dozens across the country who must to stop selling prescription drugs to U.S. residents after the pharmaceutical giants got tough and cut off their supply.

Some retailers have let go of staff because of the drop in business when they stopped shipping south. One, Sun Valley Pharmacy in Altona, Man., closed last month.

Mr. Byers has been a country pharmacist for 25 years and runs the small Village Pharmacy in Port Elgin, a community of 436 near the bridge to Prince Edward Island. He has filled prescriptions for U.S. residents for years, in person. Last year, he and his wife, Julia, started a website to make it easier. That's when the trouble began.

In February, Pfizer ordered his store and dozens of other Canadian pharmacies, many of which mix Web sales with store sales, to stop shipping to the United States or their wholesale supply would be halted. Mr. Byers received similar orders from Eli Lilly and Co., GlaxoSmithKline, Boehringer Ingelheim and AstraZeneca.

For two months, Mr. Byers tried to defy the multinationals, filling about 60 prescriptions a week for his U.S. customers. Worth about $7,000, it was a only a small part of his business - and he realized that he did not want to risk running out of drugs for his local customers.

With regret, he signed a pledge to Pfizer that he would no longer ship drugs to U.S. customers.

Mr. Byers has not received any products from Pfizer for several months, but had enough stock to last. Now, he is waiting for the world's largest drug company, with sales of $44-billion in 2002, to resume shipments to him. And he did not receive his Glaxo shipment this week.

He said he had wanted to help his U.S. customers, but not at the expense of those in New Brunswick.

"Obviously, we're not a charity. We're running a business," Mr. Byers said. "But this is a small part of my operation. It's not all about money. I'm sending a few prescriptions across the border to help a couple of hundred people who can't afford to get the drugs they need any other way. Most are seniors. They're crying to me on the phone every day. You feel a bit of moral obligation to help.

"But it was getting to a point where I had to think about my own customers. I held off as long as I could, but I couldn't hurt the community I'm here to serve."

For a half-dozen years, it has been popular for Americans, often seniors, to take bus trips to Canadian border towns to buy cheaper, prescription drugs.

An estimated 1.5 million U.S. residents fill 10 million prescriptions a year with Canadian mail-order pharmacies. In the past year, Canada's Internet pharmacy industry more than doubled its sales to the United States, according to IMS Health, a consulting firm that tracks health data. The business was worth at least $566-million for wholesalers in 2003, up from $251-million in 2002.

(It is legal in Canada to export drugs to the United States, but illegal in the United States to import them.)

Don Sancton, spokesman for Pfizer Canada, said the drug companies are simply enforcing contracts with Canadian wholesalers.

"What we are doing is safeguarding the integrity of our pharmaceutical supply to make sure we have adequate supply for use by Canadians," he said. "We've taken steps with a number of pharmacies that aren't complying with our terms and conditions to cut off the supply."

Lyle Butts of Cape Cod, Mass., has been ordering drugs from Canada for his 91-year-old father for several years, most recently from the Port Elgin drugstore. Lyle Butts Sr. takes eight medications - a dozen pills a day for everything from angina to prostate cancer.

"He doesn't have a lot of money to spend and he wouldn't last very long without his medications," Mr. Butts said. "I'm just one of many Americans who cannot afford drugs. So what do you do? Where are you going to get them if you can't pay for them? What is happening down here is absurd. If my father didn't have his family to help he couldn't afford them. Even still, it's a struggle."

Ordering from Canada cut the Butts's $15,500 a year prescription drug bill in half. The savings are typical. Here, the federal and provincial governments regulate drug prices. In the United States, the market, worth $200-billion a year, dictates the price.

"I hate to see Canadians get kicked in the teeth by the drug companies just for helping us out down here," Mr. Butts said.

Dave MacKay, chief executive of the Canadian International Pharmacy Association, said "Dave Byers didn't have a choice but to give in to Pfizer. The drug companies wanted to make an example out of him and they hammered him."

That atmosphere may be changing. In the United States, grassroots support for legislation to legalize cheaper imports is growing. Several of the largest drugstore chains and some insurers have given their blessing. Many states, including Oregon, Wisconsin, New Hampshire, Massachusetts and Rhode Island, have started to encourage their residents to buy prescription drugs in Canada by linking on-line pharmacy websites based in Canada to state and municipal websites.

The movement secured victory earlier this week when the Minnesota Attorney-General received permission from a judge to continue an investigation into whether GlaxoSmithKline conspired with other drug companies when it decided to restrict sales to Canada.

Still, everyone agrees it is a U.S. problem to solve.

"It's not a long-term solution for Americans to get their drugs from us," Mr. Byers said. "But if we can fill a desperate need in the meantime, we should being doing it. When you're in this business, it's because you care about people and want to help them. All Pfizer and the other companies are doing now is working to ensure I can't even service my Canadian customers."

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National Post, Page FP12, 17-May-2004

Moscow expected to ratify Kyoto pact: EU ministers

By Jeff Mason

WATERFORD, Ireland - The European Union sees Russia ratifying the Kyoto Protocol on global warming soon in connection with its efforts to enter the World Trade Organization, EU environment ministers said during the weekend.

Though the ministers declined to draw a specific link between Russia's WTO entry and its support of Kyoto, they said the two issues were clearly important to Moscow.

"From their perspective, the whole WTO process and Kyoto obviously have a symmetry about them," Irish Environment Minister Martin Cullen told Reuters after an informal meeting of EU environment ministers in Ireland, current holder of the rotating six-month EU presidency.

"I think that the signals coming out of Russia at the moment are very positive," he said.

"Russia is probably engaged on a number of fronts and one of them being Kyoto and indeed the benefits of emissions trading as well. So we would expect ... that will come to a conclusion in the not too distant future."

The EU has put heavy pressure on Russia to ratify the Kyoto Protocol -- which aims to slow global warming and cannot take effect worldwide without Russian approval. Developed nations responsible for 55%t of greenhouse gas emissions have to ratify the pact for it to come into force.

Getting Russia on board became key after the United States, the world's top polluter, pulled out in 2001, leaving Russia and its 17% emissions quota with the deciding vote.

The pact has had mixed support in Russia, however, with some in favour of ratification but others -- notably President Vladimir Putin's economic adviser Andrei Illarionov -- opposed on grounds it would strangle the recovering economy.

Although the EU needs Russian ratification to prevent Kyoto from dying, and Russia needs EU support to achieve its WTO entry, EU environment ministers indicated the 25-nation bloc was not using one as leverage to obtain the other.

"The Russians continue to say that they will ratify at some point," British environment secretary Margaret Beckett told Reuters. "I don't think that you would ever find that the one is a tradeoff for the other. On the other hand, there is no doubt that there are economic advantages to Russia," she said.

"They're part of the same overall picture. That's not the same as saying they're part of the same negotiation."

Many analysts say Russia is linking WTO negotiations with its approval of Kyoto.

"The Russians see a very tight connection there," said one minister who asked not to be named. "We would never speak of a link. We believe that we can solve both on a parallel basis."

The European Commission said on Thursday the EU and Russia hoped for a trade deal this month that would be a key stepping stone in Moscow's ambition of WTO entry.

Russia must first strike bilateral deals with top trade partners before it can draw up final entry terms for the WTO, which it hopes to do later this year.

EU environment ministers played down concerns that failure by several member countries to turn in their plans would halt a January, 2005, deadline to start trading greenhouse gas emissions.

"I wouldn't present even the lateness of some of the submissions as any particular difficulty," said Ireland's Mr. Cullen. "I think it's just resolving a number of individual issues in countries, but in terms of its overall application, it will certainly happen."

The European Commission said last week only 11 out of the 25 EU states have sent their planned cuts in industrial carbon dioxide emissions to the EU executive, which polices the scheme to meet global pledges in curbing global warming.

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National Post, Page FP8, 17-May-2004

Telus gives RBC a turn

By Barry Critchley

Nothing is permanent, at least as far as the relationships between issuers and their financial advisors are concerned.

Another illustration of that adage was played out this past week when Vancouver-based Telus Corp. launched a hostile $1.1-billion offer for Microcell Telecommunications Inc.

For this transaction -- which may end up getting topped by either BCE Inc. or Rogers Communications Inc. -- Telus used a different advisor than it did on its last mega acquisition. That was the $6.6-billion purchase of Clearnet Communications Inc., a deal that was announced in the summer of 2000. Back then, J.P. Morgan & Co. Inc. and TD Securities were advisors and lenders; this time round RBC Capital Markets -- which last time advised Clearnet -- is the sole financial adviser to Telus and the provider of the necessary wherewithal to fund the all-cash purchase.

Robert McFarlane, chief financial officer for Telus, said: "TD has been one of the primary bankers for Telus over the past number of years. RBC Capital Markets has had a relationship with Telus as well. But we have never had an exclusive relationship. TD is definitely one of our primary bankers and advisors. But this time round we decided to spread it around."

McFarlane added that awarding the mandate to RBC is "no reflection of any animosity. We don't give everything to one firm," he said, noting "the Microcell transaction was initiated internally."

McFarlane said the company didn't have a beauty contest prior to awarding the business to RBC, "because the whole Street knows what you are going to do before you do it. We take pride because there was no leak on this deal," he said, noting that there are two elements to the $2.1-billion bank credit facility that will be used to fund the Microcell purchase: a $1.6-billion facility that was recently renewed and on which TD Bank and RBC are co-leads (there are 16 other institutions in the facility that was renewed at the same time as Telus held its annual meeting); and a $500-million bridge facility that is being provided by RBC.

"The bridge will be syndicated," said McFarlane, adding that TD found out that it wouldn't be involved at the same time as the market was told about the offer for Microcell. TD Securities wasn't saying anything at week's end. There has been some speculation that it was conflicted because it is acting for another buyer. "It's pretty close to Rogers," said one market participant. While there may be some surprise that TD Bank -- of which Darren Entwistle, Telus's chief executive, is a director -- isn't involved with the Microcell purchase, RBC has been a consistent mergers and acquisitions advisor to Telus. For instance, the firm advised on the June, 2000, purchase of 70% of QuebecTel Group -- a $582-million transaction. RBC also advised on three acquisitions done in 2001: the $29-million purchase of the Toronto-based Internet professional services firm Daedalian eSolutions; the purchase of the Canadian unit of Oklahoma-based Williams Communications LLC and the US$77-million buy of the Canadian operations of PSINet.

Adds McFarlane: "The point is that no one has an exclusive. TD has been our primary advisor, but not the exclusive one."

But for the past 3 1/2 years, TD has been all over Telus. Here's a potted history of the bank's involvement:

- August, 2000: Telus announced that it had reached an agreement to acquire Clearnet Communications for $6.6-billion. That deal was part cash and part paper and valued each Clearnet share at $70 a share. TD Securities and J.P. Morgan acted as financial advisors to Telus and fully underwrote the debt component of the transaction's financing. In total, the two lenders ponied up $7.7-billion of credit to Telus to enable the purchase to proceed.

- March, 2001: Telus said it had entered into a fully underwritten $4.5-billion commitment with TD Bank for a new senior unsecured credit facility. "This is believed to be the largest underwriting of credit facilities ever completed by a single Canadian bank for a Canadian corporation," said Telus at the time. There were three aspects to the credit facilities: a $1.5-billion, three-year revolving credit facility; a $1-billion 364-day extendible revolving credit facility converting to a one-year non-revolving credit facility; and a $2-billion 18-month non-revolving credit facility.

Proceeds of the credit facilities were used for general corporate purposes, including the refinancing of existing debt and to support commercial paper programs.

- May, 2001: Telus announced the pricing of concurrent Canadian dollar and and U.S. dollar unsecured note offerings for total gross proceeds of about $6.7-billion.

Telus sold $1.6-billion of five-year notes and US$3.3-billion of notes with six- and 10-year maturities.

"These combined offerings are believed to represent the largest public debt issuance ever by a Canadian corporation," said Telus at the time. TD Securities was lead manager on the local-currency offering, while J.P. Morgan Securities and TD Securities jointly managed the U.S. dollar offerings. At the same time, Telus said it had also signed a new $2.5-billion credit facility with TD Bank. Telus ended up borrowing a smaller amount than the $4.5-billion originally anticipated "because of the success of the note offerings." In time that $2.5-billion facility became the recently renewed $1.6-billion facility. (McFarlane said that Telus hasn't drawn on the facility.)

- September, 2002: Telus raised $337.4-million via the sale of 34.3-million non-voting shares, with each share priced at $9.85 a share. TD Securities was the lead manager on that financing, which generated $13-million in underwriting fees.

Net proceeds from the issue were used to repurchase and repay debt, including bank debt incurred to repurchase notes of Telus and notes and debentures of Telus Communications. Telus repurchased about $400-million principal amount of such notes for a cash outlay of approximately $308-million.

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National Post, Page FP3, 17-May-2004

In search of an oilpatch Liberal for Ottawa

By Claudia Cattaneo

Last fall, for the first time after many years of hostilities, it looked as though Paul Martin's Liberals and Calgary's oil establishment were on the verge of a big breakthrough: a joint push to elect a star Liberal candidate in a new Calgary riding, who'd then be offered a cabinet position with clout.

Well, the whole thing flopped.

In fact, some say the strategy backfired to the point the Liberals may be no further ahead to end their 36-year drought in Cowtown in the coming federal election.

What happened?

Observers say the plan fizzled largely because of Mr. Martin's inability to build on the momentum he ignited in the city last year. At the time, Liberal pundits felt Calgarians, fed up with having no voice in Ottawa on major issues relevant to Western Canadians, were warming up to giving him a go.

"The analogy I use is that of surfing," said Roger Gibbins, president of the Canada West Foundation. "The hope was that Mr. Martin would create the wave, and then the star candidate would be able to ride that wave. If you don't have the wave, no matter how good a surfer you are, you are left standing on the shoreline."

But the wave went flat amid the Liberal sponsorship scandal and Martin's broader agenda going off the rails, Mr. Gibbins said, so "everything that went wrong nationally with the government meant that it was difficult to generate that essential boost in the province or in the city."

There were other problems, too. It didn't help that the Liberals failed to line up a star candidate with oil connections.

The star would have represented Calgary South Centre, a new riding created by the division of Calgary Centre, held by former Tory leader Joe Clark. While Calgary has not elected a Liberal in a federal election since 1968, the last time they won a seat was in Calgary Centre, when Pat Mahoney won by 756 votes.

Many were courted. In the end, the overwhelming response was: thanks, but no thanks. Across the board, it was felt the risk of giving up an executive career to run on the Liberal ticket, in such a right-wing stronghold, was just too great.

People were also miffed that Mr. Martin and his advisors wouldn't go out of their way to make it happen, either. It appears the Liberals could have helped their cause by offering the candidate a cabinet seat ahead of the election, a gesture that would have ensured profile, power, and the glow that comes with having been handpicked by the Prime Minister.

"The view [by Mr. Martin and his office] was that that was an unusual step that would be taken only for an outstanding candidate like [former New Brunswick premier] Frank McKenna," said one of those approached. "People they spoke to just could not believe the attitude. People just weren't prepared to commit hara-kiri without some kind of comfort."

One observer said there was a feeling that Calgary's small, unelected Liberal establishment never really wanted to line up a powerful candidate, who would have threatened its direct connection to the Prime Minister.

In the end, the Liberals did -- briefly -- find a star of sorts, but not with an oil industry background: former Calgary police chief Christine Silverberg.

That, too, got messy. Ms. Silverberg, who would have taken the riding away from Julia Turnbull, a long-time Liberal who'd been campaigning for two years, backed out almost immediately. And an irate Ms. Turnbull blasted her own party for treating her so poorly. Ms. Turnbull was eventually cleared by Mr. Martin to run.

Observers say if there's one winnable riding in Calgary, it's Calgary East. Liberal candidate James Maxim, who has worked in the oil industry, said he wants to speak for the sector if elected -- even though he hasn't received the oil establishment's official blessing and is not close to Calgary's Martinites. "The Liberal party in this future government is going to need somebody who has a background in oil and gas who can explain these issues," he said.

And there are many. The sector's current wish list includes: a rationalization of federal and provincial regulatory processes the time it takes to get projects permitted in places like the East Coast offshore; a desire to see governments return to research related to energy, such as enhanced recovery of low productivity wells and from the oilsands, as well as to reduce the environmental impact of energy development; and help on the human resources front to ease manpower shortages that are expected to get bigger with oilsands expansions and the building of new pipelines.

If there's one bright spot for Calgary and its dominant energy sector, it's the sense that Mr. Martin has shown a willingness to build bridges and deal with grievances and irritants, in sharp contrast to Jean Chretien.

Federal Resources Minister John Efford has impressed oil types by showing enthusiasm for the industry for first time since Anne McLellan held the portfolio between 1995 and 1997.

Ottawa's decision to sell its stake in Petro-Canada, along with the suspension of duties on foreign-owned offshore oil and gas drilling -- a big sore point with the sector that contributed to making East Coast exploration among the most expensive in the world -- are seen as positive steps.

Ironically, though, the improved relations may have also tempered Calgary's desperation to send an oilpatch Liberal to Ottawa.

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National Post, Page FP1, 17-May-2004

OPEC under pressure on oil prices

With record high oil prices threatening the global economy, ministers from the Group of Seven pledged yesterday to pressure OPEC into increasing production.

According to reports from London, G7 finance ministers will issue a tough statement this week aimed at the Organization of Petroleum Exporting Countries urging action to bring down oil prices before they damage the economic recovery in the United States.

The G7 ministers will meet in New York this week.

Gordon Brown, U.K. Chancellor of the Exchequer and chairman of the International Monetary Fund's ministerial steering committee, will also urge the OPEC nations to take urgent action to ease the oil price crisis, which is hurting industry and consumers alike.

The impact of the high crude price on the world's leading economies is expected to show through in inflation data released this week.

John Howard, the Australian Prime Minister, said yesterday sustained high oil prices, now at 21-year highs, would affect inflation.

Benchmark U.S. crude oil hit $41.56 a barrel on Friday, the highest price since the New York Mercantile Exchange began trading crude futures 21 years ago.

"If the price stays at the current level for a long time, of course it will have an impact on inflation," Mr. Howard told Australian television's Ten Network. "But it's too early and it would be wrong of us to make that judgment."

Record oil prices and the prospect of higher interest rates in the United States are the biggest threats to the fastest-growing Asian economies in four years, finance ministers and central bankers said yesterday.

Juanita Amatong, Phippine Finance Secretary, said the government would lower its growth forecast for this year because of higher oil prices .

"Because of oil prices, we'll have to revise down the growth forecast" from 4.8%, Mr. Amatong said in Jeju, South Korea, where officials were attending the annual meeting of the Asian Development Bank.

A steep rise in oil prices hits economies in several ways. There is the effect on inflation, pushing central banks and governments towards tighter monetary and fiscal policy. There is also a transfer of resources away from oil consumers to oil producers. Because the producing countries tend to increase their spending by less than the consuming countries cut theirs, the net effect on global demand is negative.

Also, in a subtler effect, which some economists believe is the most powerful, a steep rise in oil prices upsets the pattern of demand in the economy.

Meanwhile, key OPEC producer Iran gave guarded support last night to a Saudi call to raise OPEC supplies by 1.5 million barrels daily, but cautioned that oversupply could deflate oil prices towards autumn.

Saudi Arabia, OPEC's leading producer, last week called on the exporters' group to boost its output ceiling by a minimum 1.5 million barrels per day (bpd) to prevent oil prices, now at 21-year highs, from derailing world economic growth.

"A possible increase of OPEC production by 1.5 million barrels per day would display the organization's co-operation and understanding with consumers even though OPEC is not responsible for the situation," Hossein Kazempour Ardebili, Iran's OPEC Governor, said on the state oil company's Web site.

The official from Iran, OPEC's second biggest producer, said Tehran was concerned that growing global oil inventories would pressure prices towards the end of the third quarter.

"We are still concerned about the trend of crude oil stockpiling by the consumer countries ... that may push prices down in the future as we enter into autumn," he said.

Mr. Kazempour said the proposed 1.5 million bpd increase in OPEC's output ceiling would only legitimize current leakage over official cartel supply limits.

"Secondary sources" that regularly monitor output from the Organisation of the Petroleum Exporting Countries say the producers are pumping more than 1.5 million bpd over their formal 23.5 million bpd output quotas, he said.

"Whatever agreement is reached on raising the OPEC production ceiling, or quotas, would in practice be a formalization of the presently available surplus in the market, fully evident in the consumer countries' rising level of stockpiling," said Mr. Kazempour.

Mr. Kazempour said OPEC was not to blame for shoving U.S. crude beyond $41 a barrel, adding that high-flying oil prices had been sparked by instability in the Middle East and refinery bottlenecks in the United States, the world's biggest consumer.

OPEC is due to discuss Riyadh's proposal at the International Energy Forum in Amsterdam on May 22-24. Policy would be finalized at a cartel meeting set for June 3 in Beirut.

Of the 11-member producers' group, only Venezuela, a top supplier of crude and products to the United States, has publicly rejected the Saudi call to raise output.

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National Post, Page A04, 17-May-2004

PMO involved in sponsorship program, Liberal MP says

By Kate Jaimet

OTTAWA - Political direction for the scandal-plagued $250-million sponsorship program came directly from the office of former prime minister Jean Chretien, Liberal MP Walt Lastewka said yesterday.

Speaking on CTV's political program Question Period, Mr. Lastewka said statements by Mr. Chretien's former chief of staff, Jean Pelletier, made it clear the Prime Minister's Office and former public works minister Alfonso Gagliano gave political direction to the program.

"I think it was very clear," Mr. Lastewka said in response to a question. "Mr. Pelletier ... said: 'My office was involved.' He said the minister's office was involved. We know that there was over-involvement by the minister and the Prime Minister's Office."

Mr. Lastewka stopped short of saying Mr. Chretien himself was involved in the awarding of sponsorship contracts to events and to advertising agencies.

"The other unanswered question is: To what extent did [Mr. Pelletier] get directions from his boss, the prime minister himself?" Conservative MP Jason Kenney said. "We also don't know exactly what the current Prime Minister, Mr. Martin, knew, and when he knew it [and] why he authorized hundreds of millions of dollars to flow into this secret unity slush fund."

The sponsorship program channelled $250-million of public funds into events, mainly in Quebec, through a handful of Liberal-connected advertising agencies. The government defended the program as a way to raise Canada's profile in the province after a close call in the 1995 referendum. But Auditor-General Sheila Fraser's report found the awarding of the contracts "broke every rule in the book" and ad agencies skimmed off fees totalling $100-million.

(Ottawa Citizen)

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National Post, Page A09, 17-May-2004

Foreign journalists' tests of Athens security not welcomed by Olympic organizers

Greece has appealed to foreign journalists, particularly the British, to stop sneaking into Olympic venues. Incensed by the arrest Saturday of three more British journalists who illegally tried to enter the main Olympic stadium, the Athens Games organizers said yesterday the actions endangered venue security as well as journalists' own safety. The officials said a full security curtain would come down on all Olympic sites in two weeks. The Saturday intrusion was the third into an Olympic venue in the past week as part of some foreign media's efforts to test security arrangements for the August Games. The campaign was set off by two small bomb attacks by local anarchists in Athens this month, which caused no casualties and little damage. "Olympic security will be fully applied starting June 1; until then all Olympic worksites are guarded.

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National Post, Page A11, 17-May-2004

The saga of an agrarian plagiarist

By Colby Cosh

The Supreme Court's decision in Schmeiser v. Monsanto, expected on Friday, will mark the end of a drama that has lasted about six years -- except it won't be, if I know Percy Schmeiser. Which I don't.

But I surely do know his type. One almost pities the U.S. agri-giant, for while it will almost surely win in court on Friday, and win big, it has picked a fight with the kind of guy who just won't quit --the cussed, unrelenting small-holding farmer, whose distrust of big institutions was the seedbed of Hellenistic civilization and the American Revolution.

Mr. Schmeiser, who grows canola near Bruno, Sask., has become an unlikely hero of the worldwide green left since he first started fighting with Monsanto in 1998. He has visited Bangladesh, India, Poland, New Zealand and other countries, telling his tale of personal struggle against a corporate behemoth. Yet back home, rural sentiment probably runs, at a guess, at least two to one against him. Many Western farmers have a marked, almost tender affection for Monsanto. This doesn't mean they aren't just as stubbornly self-sufficient as Mr. Schmeiser; they merely take a long view, seeing Monsanto's research into genetically-modified crops as a shot at preserving their business model and their independence over the next century.

The battle began when Monsanto got an anonymous tip that Mr. Schmeiser had an unauthorized field brim-full of the company's Roundup Ready canola. The patented Roundup Ready is genetically engineered to resist the powerfully lethal glyphosate in Monsanto's Roundup brand herbicide, so it allows farmers to plant earlier and spray more often, wiping out a broad spectrum of weeds without hurting the crop. That means higher yields, and authorized growers are insured by Monsanto for the cost of the seed if weather wipes out the crop. Since its 1996 introduction, the product has taken off in Canada like Internet porn.

Of course, there's a catch: To legally grow Roundup Ready, you have to purchase it by the acre and agree not to save the seed for planting in the next crop year. You're supposed to buy it anew from Monsanto every time out. If you're found growing a glyphosate-resistant crop without having signed a user agreement -- and Monsanto has private detectives on the payroll to catch such people out -- you can end up in court. That's what they did with Mr. Schmeiser when samples from his crop were found to consist of more than 90% Roundup Ready canola.

Mr. Schmeiser disputes this figure, though the tests were made independently and the samples taken with his permission. His story is that some of Monsanto's demon-seeds blew onto his land in 1996 from a neighbouring quarter and adulterated his crop, mixing with the seed he was setting aside year after year. One way or another, he ended up with much or most of his crop being Roundup Ready, and he knew, and didn't report, that it was there in the mix. He is not alleged to have stolen the seed or bought it illicitly. It's a pure patent case: he is accused of knowingly using a particular genetic sequence without permission of the inventor. Of being an agrarian plagiarist, if you will.

Although he has become a hero of the Luddite anti-genetic-modification movement, Mr. Schmeiser is hardly a squeaky-clean organic farmer; like so many canola growers, he was a willing user of Monsanto's pesticides before he fell into this legal pickle. But his lawyers are now fighting the whole idea of a patent on a plant, pointing to the 2000 Federal Court decision that made it illegal to patent "higher" life forms in Canada (the case revolved around a genetically engineered "oncomouse" used in cancer research). Unfortunately, when it comes to the plant kingdom, statute and legal tradition run strongly the other way: The federal Commissioner of Patents granted enforceable intellectual property rights on a strain of yeast as far back as 1982, long before general nervousness about artificial genetic modification set in.

In the prelude to the Supreme Court hearing, the Federal Court found that Monsanto was entitled to about $20,000 in damages -- the hypothetical cost Mr. Schmeiser would have paid for the seed, plus a modest quantum for harm done to the patent. But the court also stuck the Saskatchewan farmer with the corporate giant's legal costs. His fight against Monsanto could now cost Mr. Schmeiser 15 or 20 times what merely buying Roundup Ready would have run him. And if he had reported the presence of the supposedly unwelcome seed on his land in the first place, Monsanto would have -- more than gladly -- cleaned things up at its own expense.

The legal regime that makes farmers police their own crops for Monsanto's intellectual property is certainly lamentable, and a little repellent, with its neighbourhood informants and back-road gumshoes. But Monsanto's Canadian patent on Roundup Ready runs out in 2010, and every farmer knows the rule about making hay while the sun shines. It goes without saying that Percy Schmeiser, however the coin comes up on Friday, will continue to regret nothing.

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National Post, Page A11, 17-May-2004

Shrinking Ottawa

The Conservative party's decision to make tax cuts a central plank of its election platform is welcome news: Canadians, particularly middle-income Canadians, are overtaxed. Even after accounting for inflation, the average family's tax burden has increased 40% since 1961, and now stands at 47% of income, up from 34%, according to Vancouver's Fraser Institute. Canada's high tax load is choking off innovation, productivity and new investment. Why work harder or smarter when Ottawa and the provinces collect most of the extra money your additional labours earn?

Citing recent polls, Mr. Harper's detractors will no doubt claim Canadians don't want lower taxes. But pollsters typically ask voters either/or questions about health care and tax breaks that make it hard to say no to more social spending. The beauty of the Conservatives' plan is that is does not force voters to make that choice: They propose to fund their $18-billion tax reduction scheme by honestly accounting for expected surpluses. Rather the copying the Liberal habit of lowballing expected revenue each year, then -- surprise! -- ending up with an "unexpected" year-end surplus to dole out on pet projects and friendly constituencies without Parliamentary oversight, the Conservatives would give this extra revenue back to taxpayers from the outset. As Conservative leader Stephen Harper says, there are also billions to be saved from dismantling the Liberals' sundry "sponsorship scandals, HRDC boondoggles, [and] gun registry fiascos."

Conservative tax reduction would save Canadians earning $50,000 a year about $1,000 annually. By comparison, the Liberal cuts announced on the eve of the 2000 federal election cut those same Canadians' levies by just $200 a year. The Conservatives will also seek elimination of most corporate welfare -- nearly $5-billion annually -- in favour of lower taxes for all companies, an increased child tax deduction, lower capital gains taxes and removal of the astronomical airline security tax. Combined, all this relief should spark a major economic surge in this country, akin to the rapid growth Ireland experienced in the 1990s when it made similar reforms.

In addition to tax cuts, the Conservatives' economic and fiscal plan calls for bringing more spending under the review of Parliament. (Under the Liberals, only about $55-billion of the $186-billion Ottawa spends annually is submitted to a vote in the House of Commons.) There will also be an expanded role for the Auditor-General and real democratic reforms -- such as permitting parliamentary committees to elect their own chairs and control their own memberships.

Taken together, these proposals would correct many of the fiscal excesses of the past 11 years. Going into an expected June election, we are gratified that at least one national party will provide voters with a blueprint for a smaller government and a more productive economy.

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National Post, Page A01, 17-May-2004

Ottawa errs in war crime study

By Adrian Humphreys

A major government report on the handling of war criminals in Canada is riddled with errors, a National Post investigation has found.

Of five war criminals the government claimed it has removed from Canada because of alleged complicity in wartime atrocities, one remains in the country, a second was ejected for petty street crimes with no mention of atrocities and a third did not leave during the time period claimed.

For the other two whom Ottawa says it has deported, no public information is available. Anne McLellan, the Minister of Public Safety, and Irwin Cotler, the Minister of Justice, released the figures this month in the annual report on the government's War Crimes Program.

''Our ... efforts in managing Canada's War Crimes Program send a very clear and strong message that war criminals and those involved in crimes against humanity will never be welcome in Canada,'' Ms. McLellan said at the time.

A closer examination of the report, however, calls into question the government's thoroughness on the file.

When Dejan Demirovic appears at a closed-door admissibility hearing tomorrow morning in Toronto, it might come as a surprise to those who prepared the report.

Mr. Demirovic, 28, is accused in Serbia of being part of a paramilitary unit called the Scorpions during the 1999 Kosovo conflict and helping to round up three families in the village of Podujevo, who were then shot. Nineteen ethnic Albanians died. The youngest of them was two years old.

Mr. Demirovic came to Canada in 2001 and was arrested in January, 2003, when heavily armed police, acting on an Interpol warrant, arrived at his parents' home in Windsor. Last September, Saranda Bogujevci, who was 13 years old and survived the shootings despite being hit by 16 bullets, travelled to Canada to ask the government to deport Mr. Demirovic to face trial.

Despite his continuing appeal to remain here, Mr. Demirovic is one of five alleged war criminals whom the federal government told the Post had been deported for war crimes between April 1, 2002, and March 31, 2003, the most recent figures available.

"I have absolutely no idea how that could be. He has not been deported, he hasn't even been in custody," said Dragi Zekavica, Mr. Demirovic's Toronto lawyer.

"He has not left Canada. I spoke with him a week and a half ago."

In the War Crimes Program report, released on May 4, Ottawa said officials stopped 355 suspected war criminals from reaching Canada through offshore screening.

In the report, the government said officials had prevented successful immigration and refugee claims in Canada by another 73 people by documenting participation in war crimes; and enforced 48 removal orders against people deemed complicit in contemporary wartime atrocities.

It is in the numbers of those claimed to have been removed, however, that the statistics are found wanting.

Aurelio Amaya-Zelaya is also one of the five removed from Canada because of war crimes, according to the government.

Now 39, Mr. Amaya-Zelaya was born in Olomega-la-Union, El Salvador, and came to Canada on June 4, 1989.

He was granted refugee status on Nov. 22, 1989, and two days later was arrested by Vancouver police and charged with attempted murder, possession of a dangerous weapon and aggravated assault. In 1994, he was convicted of trafficking cocaine and a year later for possession of a narcotic.

Over the next few years, he faced more convictions for violence, drugs and other crimes.

By the summer of 2002, the government appears to have run out of patience. "The Minister of the Department of Citizenship and Immigration is of the opinion that you constitute a danger to the public in Canada," an immigration officer said in a letter hand-delivered to him at his home in Surrey, B.C.

He was facing yet another round of charges, including assault and threatening, when immigration officials and the RCMP visited his apartment in June looking to arrest him but could not find him, government documents say.

It was not until July 24, 2002, that he was arrested and 10 days later he was flown out of Canada.

However, his deportation order, obtained by the Post, cites as the sole reason for his removal his assault convictions in Canada.

There is no mention of foreign crimes anywhere in his lengthy government files that were made public, although an early immigration document shows Mr. Amaya-Zelaya's reason for seeking refugee status is his claim he was kidnapped by guerrillas and forced to work with them before escaping. He said he was in danger from the military in his homeland because of his forced involvement with the rebels.

Also one of the five is Jorge Anibal Azalgado, according to the government.

Mr. Azalgado, along with his wife, Erica Moyanao Castro, and three children arrived in Canada from Argentina on Oct. 11, 2000. Nine days later they all made claims to stay as refugees.

It took a year for their applications to be heard. At the private hearings came dark allegations by both sides. From the Azalgados, there was talk of a kidnap plot against the children and Ms. Castro being the victim of rape.

From the government came allegations against Mr. Azalgado from his time in the Argentinian army, the details of which the government will not release.

On Aug. 2, 2002, the family's claims for refugee status were turned down. Mr. Azalgado was refused under Article 1 (f) (a) of the United Nations Convention Relating to the Status of Refugees, according to immigration documents. It is an ominous mark against him; that section strips refugee status from anyone who has committed a crime against peace, a war crime, or a crime against humanity. The rest of his family was refused entry because they did not meet the definition of a refugee.

When the government went looking for the Azalgados, however, they could not be found.

For nearly a year the family remained secretly in Canada, avoiding a warrant issued for their removal.

Then, on March 20, 2003, Ms. Castro's car was stopped by Toronto police investigating a traffic violation. She handed the officer an identification card that was not hers. The deceit was quickly uncovered and when her true identity was learned the entire family was arrested that day.

"I beg you to soften your heart," Mr. Azalgado implored the adjudicator at a March 31, 2003, detention review hearing before the Immigration and Refugee Board.

It appears that Mr. Azalgado was removed from Canada because of concerns over his complicity in war crimes. However, his date of departure was not until May 27, 2003, the Post has learned. That is nearly two months after the close of the reporting period of the audit.

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National Post, Page A02, 17-May-2004

Air Canada deal hinges on two holdout unions

By Paul Vieira

Air Canada and two of its most hard-line unions remained at odds last night on efforts to find additional cost savings of $200-million -- a stalemate that threatened to imperil the insolvent airline's reorganization.

The Canadian Union of Public Employees, which represents 5,000 flight attendants, and the Canadian Auto Workers are the only two unions that failed to strike deals as of last night, after a weekend of around-the-clock negotiations. The five other labour groups -- representing plane mechanics, pilots and dispatchers -- have signed pacts with the airline that will collectively shave $85-million from Air Canada's payroll.

But Air Canada needs $200-million as a requirement from Deutsche Bank, which has agreed to raise $850-million in equity that is needed for the airline to exit bankruptcy protection. CUPE and CAW are responsible for $65-million and $50-million, respectively, of the concessions required.

Air Canada said yesterday "progress was being made" at the negotiating table.

Alejandra Bravo, a spokeswoman for CUPE's Air Canada unit, said discussions between the union and airline were continuing. Sources close to the talks said last night an agreement was near.

Meanwhile, Buzz Hargrove, president of the CAW, said the union was engaged in a ''very difficult'' round of bargaining.

''The company and the creditors are just asking us to carry too big a load. It's unfair and unjustifiable,'' he said. He was not optimistic about closing in on an agreement. ''I don't feel good about where we are at.''

His union represents ticket agents, call-centre employees and maintenance workers at Air Canada's regional carrier, Jazz.

Both CUPE and CAW have said the concessions sought by the company would result in its members losing up to $11,000 a year in income.

Sources close to the airline's restructuring said the Ontario judge overseeing the Air Canada file, Mr. Justice James Farley, may have to get involved if one union holds up a deal. All the unions must agree to concessions, otherwise all deals previously reached are null and void.

Deutsche Bank wanted the savings found by Saturday at midnight, or else it threatened to walk away from its financing deal. It has yet to pull the plug on its $850-million financing, sources say, because talks between company management and organized labour were producing results.

Air Canada said the $200-million represents how much the unions need to give up in order to hit the $1.1-billion concessions target agreed to by organized labour and the company last year.

Deutsche Bank's agreement is seen as Air Canada's last hope to successfully emerge from bankruptcy protection, where it has languished for the past 13 months. The airline's future was thrown into serious doubt last month after its proposed equity partner, Victor Li, withdrew his $650-million investment in the cash-starved airline after union resistance to proposed changes to Air Canada's pension plan scheme.

Mr. Li's withdrawal was a big blow, as the airline had spent four months in a search for an investor.

Clearing the Deutsche Bank hurdles was also key because the airline's largest aircraft lessor, GE Capital Aviation Services (GECAS), threatened to pull its US$1.5-billion of financing for Air Canada off the table if the German bank terminated its agreement. Money from GECAS is to be used to buy regional jets and solidify the airline's cash reserves upon exiting bankruptcy protection.

Each of the airline's seven unions was asked to come up with its share of the missing $200-million in annual savings.

But some of the unions argued the airline had miscalculated how much they owed. The CAW, for example, said its shortfall was $18-million, not the $50-million assigned by the airline. Also, it said the airline has failed to shrink its business as envisaged last year during labour negotiations.

The additional savings were found mostly through wage cuts. For example, the International Association of Machinists and Aerospace Workers, which represents 10,000 maintenance workers and cargo handlers, agreed to a 6.2% salary rollback, increased use of part-time workers and changes to its sick leave benefits to find the $40-million for which it was responsible.

Ron Fontaine, a national representative with IAMAW, said the biggest hang-up to securing its deal was the inclusion of a clause to ensure all the labour groups, including management, would sustain similar-style wage cuts as opposed to opting for so-called "soft" sacrifices, such as productivity enhancements and changes to work rules.

"We wanted to make sure that people were going to step up to the plate," he said yesterday.

The $200-million in savings will help Air Canada reduce its cost structure, which analysts say is too high for it to be competitive against the discount carriers, such as WestJet Airlines Ltd. and Jetsgo, which have lower expenses. That's because discounters can offer lower fares and still generate profit. Air Canada has matched its rivals' low ticket prices, but has lost billions in the process.

Nevertheless, some analysts and lawyers for airline creditors are concerned the additional $200-million shaved from payroll costs will not be enough to turn around Air Canada's fortunes.

Besides cost savings, Deutsche Bank had other conditions, such as the unions agreeing to a mechanism to settle outstanding grievances before Air Canada completes its restructuring.

But on Friday, the company cleared a significant Deutsche Bank hurdle when it received approval from the federal pension regulator to pay back its $1.2-billion pension shortfall in 10 years, as opposed to five as dictated by law.

Air Canada filed for bankruptcy protection on April 1 of last year as it struggled to carry on business with nearly $13-billion of debt on its balance sheet.

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National Post, Page A04, 17-May-2004

Martin determined to let MPs screen judges

By Janice Tibbetts

OTTAWA - Prime Minister Paul Martin plans to give MPs a new role in screening his chosen nominees for the Supreme Court of Canada, flying in the face of advice in a report he commissioned about how to make the appointment system less secretive.

"The Prime Minister has said there must be parliamentary review and input of nominees and he's committed to seeing that happen," his spokesman, Scott Reid, said.

Mr. Reid said the new system will be in place to fill two seats on the Supreme Court that open in June with the departures of justices Frank Iacobucci and Louise Arbour.

In a report last week, the all- party justice committee steered clear of the controversial prospect of allowing politicians to scrutinize nominees.

Instead, the majority recommended changing the 129-year-old Supreme Court appointments system by establishing an advisory committee that would privately prepare a short list of candidates for the Justice Minister, who would make one or more recommendations to the Prime Minister.

The panel would be composed of members of the public, MPs from all parties, judges, lawyers and provincial representatives.

Under the current system, the Justice Minister privately and informally consults with the legal community before making one or more recommendations to the Prime Minister.

Mr. Reid said Mr. Martin is "positively inclined" toward the report's proposal, but he plans to take the committee's advice a step further to fulfill a promise to give MPs a role in scrutinizing the Prime Minister's chosen candidate.

Liberal MP Derek Lee, chairman of the justice committee, said he thinks his Liberal colleagues, who signed the majority report, were overly cautious in their recommendations after experts advised against political vetting of nominees for fear it would taint the respected Supreme Court and discourage the best candidates from coming forward. "They may have been so cautious that they lowballed a potential role for Parliament."

But he said he believes MPs can avoid a "public circus" by scrutinizing a nominee behind closed doors and having a formal protocol that includes "no-go areas" so questioning does not become too personal. "Transparency doesn't mean you do everything in public; it means parliamentarians acting on behalf of their electors get to see what's going on."

The majority report from the committee made a more watered-down recommendation that the Justice Minister should appear before the committee to explain an appointment rather than subjecting a judge to questioning.

Mr. Lee defended the Prime Minister's plans to override the report, saying it was only "advice" and it was not unanimous. The Conservative, Bloc Quebecois and NDP members on the committee all wrote dissenting reports.

Mr. Martin's plans are more closely aligned to the Conservative party recommendations.

Chief Justice Beverley McLachlin said recently she wants the coming vacancies filled by the end of July to give the judges time to prepare for the busy fall session. It opens in October with a case on whether gays and lesbians should be allowed to legally marry.

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National Post, Page A04, 17-May-2004

Ontario Grits want health pledges from federal parties

By April Lindgren

Ontario's Liberal government plans to intervene to an unprecedented degree in the coming federal election by demanding firm commitments for additional health care funding from each of the competing parties, CanWest News Service has learned.

The provincial Grits will fire the first salvo tomorrow in a budget that devotes a section to the need for additional federal health care money, said a senior Ontario government source who noted the matter has taken on added urgency in light of the Conservatives' national campaign pledge to slash federal income taxes by 25%.

"It's just not possible to have a Canadian health care system and U.S.-style taxes," the official said.

The Liberals, who are expected to table a budget with a $7.8- billion deficit, fear there will be little left in the federal coffers to bolster provincial health budgets if the race to form the next national government turns into a tax-cut competition.

While provincial Cabinet ministers have campaigned for candidates in past federal elections, the difference this time is that the Ontario government itself will be deliberating and publicly intervening in the race.

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National Post, Page FE1, 17-May-2004

Canada's business schools get good grades

By Mitch Moxley

Eight out of 10 senior executives in Canada say this country's business schools, led by the Queen's School of Business, are just as good as schools in the United States, according to a new survey.

"The perception of Canadian schools is improving," says Derek Leebosh, a senior associate with Environics Research Group, which conducted the study. He says many of the business leaders surveyed have first-hand experience with Canadian and American business graduates, and the graduates here fared as well, and in some cases better.

Nearly half of those surveyed identified Queen's as the best business school in Canada. The University of Western Ontario's Richard Ivey School of Business in London, Ont., was second at 14%, followed by the University of Toronto's Joseph L. Rotman School of Management at 9%.

"I'm certainly happy Queen's is out in front," says David Saunders, dean of the Queen's program and chair of the Canadian Federation of Business School Deans. "But it's great for the country that this group of schools, period, are doing so well. I think that's a testament to the quality of our education system, and the products and services that our business schools -- all our business schools -- are offering. On average, it really is an outstanding product."

Queen's was on top for non-degree executive education programs as well, with 29% of executives favouring the school. Ivey finished second at 15% and Schulich School at York University was third at 11%.

Queen's also placed 12th on the sixth annual Financial Times executive education ranking (above) for the world's best non-degree programs open to all executives, released today. Two Spanish schools -- Iese Business School and Instituto de Empresa -- slipped past Queen's, which finished 10th last year.

Mr. Saunders says he is not overly concerned with the slight drop. "It's highly competitive. While we always prefer to be going up, not down, I'm certainly not hitting the panic button because it reflects the strength in the sector."

Queen's finished in the top 10 in four of the 16 categories, ranking third in the "follow-up on graduates" category and 10th in "preparation" (not shown), but 24th in the "quality of participants" category.

Other Canadian business schools on the Financial Times list are Richard Ivey at 22nd, York's Schulich at 40th, and Rotman, in 42nd place. Ivey, which moved up five places from last year, had the 12th best faculty on list.

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National Post, Page FP1, 17-May-2004

If Wal-Mart is worried, maybe we should be, too

By Peter Morton

WASHINGTON - It is probably time to worry when Wal-Mart starts to worry.

Lee Scott, chief executive of the world's largest retailer, was fretting out loud the other day about the impact of higher energy prices on Wal-Mart Stores Inc.'s customers.

From Wal-Mart's perspective, skyrocketing gasoline prices are taking US$7 each week out of the average Wal-Mart customer's wallet. One hundred million people shop at the 1,475 Wal-Mart stores each week, a reason why the Arkansas-based chain earned US$2.2-billion during its first quarter this year.

"I started the year with an optimistic view," Mr. Scott said. "I still feel that way. Although I am concerned about high gasoline prices, I believe that growth in employment and real income will lessen the impact."

Consumer spending has been one of the few stabilizing forces in the U.S. economy during the past three years.

Despite the disappearance of 2.3 million jobs, worries about terrorism and Iraq, Americans have continued to spend. U.S. employers began to rehire in past months workers they were quick to jettison a few years ago.

It may be too early to tell, but there is concern rising oil and gasoline prices could undermine the U.S. and global economies.

"This oil and gasoline price increase will dampen spending," said Larry Jones, a manager at Durham, N.C.-based NCM Capital Management Group. "There's reason to be cautious about that."

Part of the impact will depend on how long oil prices remain high. Each US$10 hike in crude costs clips about 0.3% from U.S. economic growth. Despite being so dependent on foreign oil, the U.S. economy is the least vulnerable among industrialized countries to sharply higher oil prices.

Last week, the International Energy Agency said the countries in the Organization for Economic Co-operation and Development, which includes Canada, would lose 0.4% of their collective growth. And these figures may be understating the impact since the IEA based its projections on oil moving from US$25 per barrel to US$35 per barrel. It is hovering around US$41.

However, pinpointing why oil and gasoline prices are skyrocketing, especially in the United States, is not as simple as it appears. Gasoline prices are about US$2 a gallon across the country.

Much of the blame has been laid on Middle East producers. Led by Saudi Arabia, OPEC decided this year to cut production by one million barrels a day. In a dramatic reversal, Saudi Arabia now plans to propose at next month's OPEC meeting a boost in production of 1.5 million barrels. That may go some way to reducing oil prices, especially leading up to the start of the summer driving season.

Yet there are more fundamental reasons why gasoline prices are so high in the United States.

Purnomo Yusgiantoro, OPEC's secretary-general, insists there is plenty of oil on global markets.

"The recent high prices are closely linked to geopolitical uncertainties, inadequate refining capacity in the U.S.A. to cope with rising demand, multiple specifications for gasoline by different states, and heavy speculation in oil by investment funds," he said.

That is what refiners told Congress last week during hearings on soaring gasoline prices.

In the past 20 years, the number of U.S. refineries has fallen from 321 to 149 and all are operating above 90% capacity. None have been built since 1976, the refiners told the Senate Environment and Public Works Committee.

"Unfortunately, our rising gasoline demand and the need for more domestic gasoline production capacity collide with public policies, local opposition and regulatory obstacles that deter increased domestic refining capacity," said Bob Slaughter, president of the National Petrochemical and Refiners Association.

Michel Ports, who represents the U.S. Society of Independent Gasoline Marketers of America and the U.S. National Association of Convenience Stores, said: "Simply stated, the environmental compliance burdens placed on the nation's motor fuel refining industry over the past 20 years have effectively destroyed the world's most efficient commodity manufacturing and distribution system."

In the U.S., crude oil represents about 46% of gasoline prices while taxes add another 24%. Marketing and distribution is 11%, leaving just 19% for refining costs, including new environmental rules.

"We don't think environmental requirements are a major factor in the run-up of gas prices," Don Zinger, chief of staff of the Office of Air and Radiation for the U.S. Environmental Protection Agency, said recently.

Even with a reduction in global prices, however, few expect relief at the pumps soon. "There is a need for consumers to fasten their seatbelts," says Richard Levitan, a Boston energy consultant.

Whether that ultimately hurts the U.S. recovery, remains to be seen.

Bill Cheney, chief economist at MFC Global Investment Management in Boston, said high energy prices can cut into consumer spending or worse, their mood.

"Oil prices have a nasty history of being associated with drastic falls in consumer and business confidence which could, in principle, be a bigger deal," he says.

And that means Mr. Lee may not get his US$7 back for some time to come.

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The Daily News (Nanaimo), Page A07, 17-May-2004

B.C. Liberals face horse race with NDP next May

VICTORIA -- There are few guarantees in politics, but most Canadians would be willing to believe a government elected with a 75-seat majority is a lock to win a second term, albeit with a few less seats.

Premier Gordon Campbell's Liberals captured 77 of 79 seats in the May 2001 election while on their way to dumping the two-term New Democratic Party government and winning the most lopsided electoral victory in British Columbia history.

One of the party's first moves was to legislate fixed election dates, giving British Columbians -- and the opposition NDP -- a clear view of the path to the next election exactly a year away.

On May 17, 2005, the surprising consensus from business, opposition and even some Liberals is that the Campbell government is not a sure-shot for a second term. What went wrong?

Or, as one business leader suggests, are voters witnessing an extreme example of a B.C.-style political correction?

''Obviously 77 to two was an extraordinary result and they obviously had one way to go and that was down,'' said Jock Finlayson, B.C. Business Council vice president.

Campbell's Liberals, who promised British Columbians a new era of hope and prosperity fueled by a down-sized government and growing economy, knew they'd become victims of their electoral success, he said.

The NDP traditionally receives between 30 per cent and 40 per cent of the popular vote in British Columbia elections. Without the development of a real political alternative to the left-wing NDP since the 2001 election, it appears the NDP will be courting those voters again, Finlayson said.

''Most people in the business community expected that we would have a real political contest in the province going into the 2005 election,'' he said. ''I didn't think they (NDP) were going to disappear.''

The ace-in-the-hole that gives Campbell an upper hand heading into the election year is British Columbia's steadily growing economy, Finlayson said.

''The Campbell government will have a positive economic story to tell,'' he said. ''We're going to be in an improving economic environment rather than a deteriorating one and that should work to the advantage of any government that's seeking re-election.''

Joy MacPhail, the retiring NDP leader, said the Liberals may try to focus on the economy as a success, but they can't hide that they've cut out the hearts of many British Columbians to get there.

Hospital closures, labour battles, job cuts and broken promises, especially surrounding the B.C. Rail deal, have voters looking again to the NDP, she said.

The majority of women voters left the Liberals long ago and now even male voters are considering the government too mean-spirited, said MacPhail.

Recent polls have shown a deep male-female divide among B.C. voters, she said. Almost 50 per cent of B.C.'s women voters support the NDP, while 49 per cent of male voters back the Liberals.

''There is a substantial chance that the Liberals will lose the next election,'' said MacPhail. ''Right now the people are saying that they don't want the Liberals to govern, but they are still asking some very pertinent questions of New Democrats.''

However, Finlayson said Campbell will be able to tell voters that despite being hit with the impact of the terrorists attacks in the United States, softwood lumber tariffs on B.C. lumber exports, record forest fires, SARS and the high Canadian dollar, B.C.'s economy managed to grow.

B.C. will likely outpace the country in growth next May, spurred on by rising housing starts, booming energy development and increasing business investment, he said.

Campbell will also point to the balanced budget, the successful 2010 Winter Olympic bid for Vancouver, the promise to dump photo radar and improved relations with Ottawa.

MacPhail said the NDP is already putting together an election strategy that focuses on portraying the New Democrats as the positive alternative to the extreme agenda of Campbell's Liberals.

The NDP, under new leader Carole James, wants to end the B.C. political tradition of voting out the current government and replace it with a decision by voters to support a new government, MacPhail said.

The fiery debater couldn't resist taking a shot at Campbell, who she said lost the hope and trust of voters.

''The biggest single fault of this government is Gordon Campbell losing the trust of British Columbians,'' MacPhail said. ''They may have early on been troubled by some of his personal characteristics, but now they actually don't trust him at all.''

Back to Top

 

The Daily News (Nanaimo), Page A06, 17-May-2004

PM no closer to the truth

When Prime Minister Paul Martin rode into office on a wave of goodwill only to be caught in the undertow of the sponsorship scandal, he promised to get to the bottom of the mess before calling an election.

He's riding his surfboard again these days, though, buoyed by a surge in the polls as outrage over the $250-million sponsorship scandal dissipates. He is poised to drop the writ for a June 28 election.

But Martin is nowhere near honouring his promise to root out wrongdoers, and Canadians are scarcely closer to the truth than they were when Jean Chretien rode off into the sunset.

The arrest for fraud this week of Chuck Guite, a relatively low-level bureaucrat who had access to Ottawa's movers and shakers, and Jean Brault, the president of Groupaction marketing, has done little to clear the air.

Conservative Leader Stephen Harper called the timing of the charges ''more than a little suspicious'' considering recent calls made by Martin's chief Quebec organizer, Jean Lapierre, for the RCMP to make arrests and diffuse public anger.

''It would provide relief, because I think people want to see people found guilty,'' Lapierre said April 21. ''They want to see people accused and eventually found guilty, that's clear.''

No one is yet accusing the RCMP of cowtowing to its federal overseers and the RCMP vehemently denied it was influenced, but the optics are certainly bad. Martin's man calls for charges and arrests are made on the eve of a campaign, providing Grits with both ammunition and cover.

Liberals can now point to the arrests as proof they're serious about finding out how $100 million in tax dollars was funnelled to Liberal-friendly advertising firms in Quebec that had made significant contributions to the federal Liberal party.

They can also clam up when they're asked pertinent questions on the campaign trail, citing the confidentiality of criminal proceedings.

The parliamentary committee probing the scandal was suspended Tuesday after Liberal MPs flexed their majority muscle and will be terminated with an early election call. That means some 90 witnesses, including Liberal power brokers, won't testify before the drafting of an interim report.

Calling the election now also enables the tarnished Liberals to paint Guite and Brault as scapegoats and Guite, in particular, as a rogue bureaucrat operating without any political direction.

But the notion Guite was flying the sponsorship plane solo is laughable at best. Martin himself has admitted ''there had to be political direction'' in the sponsorship scandal.

Canadians still don't know the truth and Martin is insulting voters -- not to mention breaking an oft-repeated promise -- if he pulls the plug on the probe before it answers the central question: Who gave Guite direction and, if he were fraudulently freelancing, why was he never found out?

The buck shouldn't stop in the bureaucracy.

Even though he has articulated no bold vision, Martin now claims he needs a mandate from the Canadian people. Curious.

He's already reigned unelected for more than 150 days without dropping the writ, approaching the record set in 1949 by Louis St. Laurent.

Why has Martin been hit so hard with spring election fever? Maybe it's because he doesn't know where the RCMP investigation might lead to by fall. Maybe it's because he does.

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