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By THE CANADIAN PRESS Personal income tax re- duced 10 per cent effective July 1; limited to $600 maxi- mum annual cut for individ- " gal. Corporation income tax, sales tax and special old age security tax unchanged. Establishment of Canada Development Corporation to raise $1,000,000,000 from gov- ernment and public for invest- ment in industrial expansion; shares $5 each. Taxpayers wholly - sup- ported nieces or nephews to qualify as income tax deduc- tion on same basis as depend- ent children. Deductable allowance of $550 if uncle or aunt depend- ent on taxpayer for support because of mental or physical infirmity. Full deduction of trade un- fon dues allowable without af- fecting standard $100 deduc- tion as formerly. Taxes on liquor, beer, wine and tobacco unchanged, Maximum deduction for pension or retirement fund contributions raised to 20 per cent of income from 10 with $2,500 ceiling continued. Costs of advertising in for- eign - owned magazines and newspapers. disallowed as de- ductible business expense after Dec. 31, 1965, Canadian editions of Time and Reader's Digest to be exempt from magazine adver- tising legislation. Deficit of $300,000,000 fore- cast for 1965-66 fiscal year on revenues of $7,350,000,000 and expenditures of $7,650,000,000. Lump - sum payments on termination of employment to be classed as non-taxable if transferred to pension, retire- ment savings or deferred profit-sharing plans, PERSONAL TAX CUT HIGHLIGHTS BUDGET Industries allowed 50-per- cent tax deductibility on capi- tal costs of projects. aimed at reducing water pollution by wastes, Trustees of pension funds, retirement savings plan and deferred profit-sharing plans required to report annua:ly to tax authorities, Full deduction allowed on costs of investigating factory or power development sites, Fast tax write-offs for ma- chinery and equipment pur- chaess by Canadian - owned firms extended to end of 1966 from old expiry date of June landscaping business property 13, 1965, cancelling a lease or obtain- ing a licence, franchise or trademark. Grants equalling 25 per cent' of increased outlays for indus- trial scientific research to re- place current 150-per-cent tax deduction, effective in 1967; grants automatic on up to $50,000 annually and. by prior agreement for larger amounts, Tax write - off period for grain storage facilities built between May 1, 1965, and Dec 31, 1966, shortened to four years from 20 for wooden structures and 40 for masonry buildings. Federal sales tax on drugs continued but likely to be re- moved if Commons food and drug committee recommends it, Gross national product to grow more than seven' per cent in 1965 as a result of tax changes. Customs Act amendments to remove discriminations against goods imported from Britain. Companies incorporated in Canada prohibited from mov- ing inconporation abroad for tax-evasion purposes. The Hometown Newspaper Of Oshawa, Whitby, Ajax, Bowmanville, Pickering and neighboring centres. ¢ Oshawa Gimes Weather Report Cloudy and cool today. Clearing tonight, Colder Wednesday. Low tonight, 35. High tomorrow, 50, VOL. 94 -- NO. 98 S0e Per Weak Home Belivered OSHAWA, ONTARIO, TUESDAY, APRIL 27, 1965 Authorized gx Second Clow Malt Post Office Department TWENTY PAGES re) A stolen car was hoisted out..of. the Oshawa yacht basin near the east harbor wall this morning by crane operator Rene Lalonde, under direction of police and firefighters. The car, owned by Ottavia Provenzano, 3 Harwood Ave., Ajax, was reported stolen from _ his residence at 8 a.m. today. STOLEN CAR PLUNGES INTO LAKE At? acm., Mr. Lalonde, an employee of Cargo Dockers Lid., noticed tire tracks leading to the west wall, He notified Oshawa Police and PC Mike Michalowsky inves- tigated. Scuba divers, Bil! Wilson and Ken _ Gibson, went to the scene and aided in recovery operations. Sgi. Ken Young of the Oshawa police detachment said the jate model car was resting on its roof in 20 feet of water. He said it appeared a plank was used to hold the brake while the auto was put in gear. The car was empty and fio one was re- ported missing India Claims 6 Tanks, Border Battle Victory | It Doesn't Have Much Merit, | From AP-Reuters NEW DELHI (CP) -- India| claimed today that its troops destroyed at least six tanks and) inflicted "very heavy casual-| ties" on Pakistani Army units) attacking across the Kutch. The fighting which began Monday around Biar Bet has)by the Indians indicated their)med Ayub Khan said Monday/get into this kind of business." : back| night neither country could af-| since the fighting erupted Sat- ford war and that it was fan-!stock exchanges said the cor- stopped, an Indian defence min- istry spokesman said jthan 20 miles south of the un-|diplomats in New demarcated nizes. CASUALTIES SAID HEAVY India's casualties were ported heavy. Doctors in Bhuj, line India donors Sketchy information released units have. been falling Delhi trying recog- to get India and Pakistan to de- clare a cease-fire and talk over their territorial disputes. re- TENSION EASES j A | Tension over the barren bor- frontier}an Indian town southwest of the|der area eased slightly as the|curities marketplace, said: 'As into the disputed Rann ofjfighting, called for 1,000 blood|leaders of both countries urged|@ matter of principle, I think peace Pakistan President Moham- Despite the claims, it ap-|urday at Point 84, which isjtastic to think Pakistan would peared Indian units also had near the north-south road from) go to war over an area where been severely mauled in three Diplo, Pakistan, to Khavda, In-|even drinking water was not days of fighting which began|dia | available, Saturday. Pakistani units were reported holding points well within what} India claims is its territory, in-} dicating that the Indian Army tanis kistani's view, should be along the 24th parallel. This is more) Biar Bet was described as an} His statement followed an Indian fallback position for| earlier one by Indian Prime} troops who had fought at Point) Minister lal Bahadur Shastri) RY There claims are correct which proclaimed his country'slinvestor interest or Canada's! was no indication who desire was unable to expel the Pakis-) holds Biar Bet, but if Pakistani other ( Indian: Shastri The frontier, according to Pa- troops have been pushed south! with the situation in the dis-|from for peace. But in an-! speech Monday night said India would deal | _ | By THE CANADIAN PRESS jpecially the lower brackets." * | Most 1965 Canadian budget brought/Mr. Gordon to "rectify his er- @ > \remove the sales tax on produc-|$1,000,000,000 of the position puted area "firmly. and effec-| There was intense activity by! tively." | _ Budget Reaction Negative, 'Serious Judyaent Luror' of the reaction to the} Mr. Bennett said he expected down Monday night by Finance|ror"' in imposing an 11-per-cent {Minister Gordon was disapprov-|federal tax cut on building ma- ing--as exemplified by the reac- terials. ition of A. A, Cumming, presi-| The Canadian Chamber of jdent of the Canadian Manufac-|\Commerce said it was disap- jturers' Association, who said it/pointed there were no corpora- jwas "a serious error of judg-/tion tax cuts, but it welcomed iment," certain other provisions. | One of the few who thought it} Chamber president A, J, Little was a good budget was Premier|said in a statement from Mont- Louis Robichaud of New Bruns-|real: 'While business welcomes jwick, who said it was "indica-|the reduction in personal, income § tive of the confidence of Cana-|tax rates which will stimulate idians in their~bright future,"'. \demand, it is disappointed that Mr. Cumming said: "From!/Mr. Gordon did not see fit to the manufacturing industry's|give some corporate tax re- |point of view it's a damp squibllief." \budget. Mr, Gordon's failure to| The budget proposal for the Canada Develop- tion machinery and equipment)ment Corporation, financed by a is a major letdown and a se-|government - inspired mutual rious error of judgment." ifund selling $5 shares to the | Premier Robichaud said the|public, calls for "close exami- He - , 10-per-cent reduction in personal |nation," the chamber said. weaty ey income taxes--a move which) 'While the objective is en-| TORY CRITIC got a mixed reception--"is im-jcouring investment by Cana- - +. two-bit budget... portant to the individual, but of/dians in their own enterprises ~ equal importance to the busi-|is desirable, there is some ques- ness community is the over-all/tion that such a structure may) tax reduction that will release encourage too much investment $265,000,000 for consumer spend-|control by the government." ing." V. W. Scully, president of British Columbia's Premier Steel Company of Canada, ex- W. A. C. Bennett disagreed with)pressed stronger views on the his counterpart from the Mari-|proposed new corporation. times. He described the budget! He said: 'I am against gov-| as "very disappointing." ernment owning business -- ut-| He said the reduction in per-iterly against it. I think sonal income taxes was not/the government has enough to enough, "I looked for a gga] fe governing without getting reduction in income taxes, es-linto the business area.' Major Stock-Exchanges Say Lt. - Gen. Howard Graham, president ofthe Toronto Stock Exchange, Canada's largest se- the 'Toronto - Dominion Bank,} said he was "disappointed cor- porate income taxes were not altered. . I had hoped we would have been brought closer to the U.S. pattern." | Corporate income tax in the U.S. is 48 per cent of income and in Canada 52 per cent. "I it unfortunate that the govern-| ment has found it necessary to INTERPRETING THE BUDGET Insurance Policy Against Election OTTAWA (CP) -- Despite of- ficial disclaimers, Finance Min- ister Gordon's new budget has all the appearance of an insur- ance policy against the day when a general election may be held, Political observers doubt that the new budget is a sure signal the government will call an election this spring or fall. But if an election becomes necessary, either by defeat of the minority Liberal govern- ment in the Commons or by such a stalemate in parliamen- tary affairs that nothing else can be done, the budget is re- range than on the economy. The 10-per-cent sonal income fiscal year, jers, there are cut taxes up to a maximum of $600 a year will put more money in the pockets of a great number of taxpay- ers--though the amount will not be large in lower-income brack- ets. However, in total it alone puts $170,000,000 more purchas- ing power into active use this But he made clear he expects the budget to have. more long- immediate effects in per- And, Mr. Gordon told report- facets of the garded as one on which the) budget which he expects will The Montreal and Canadian/would feel more comfortable if|soyernment could go to we had been able to move! polis, poration "does not appear to closer to their level of taxa- have much merit." tion," he said, phrasing remarks attributed to In a joint statement the ex-| Fred Sammis, general man-| ager of the Canadian Electrical Manufacturers Association, said the budget 'falls short of giving changes added that "we cannot see where government interven- tion in this field would be an inducement to accelerate either|the clear green signal industrial planners have been watching growth." for; The lack of a corporation tax brought reaction ranging|cial treasurer, said a corpora- "de-'tion tax cut would have been! plorable."* better than the 10-per-cent per- A. T. Lambert, president ofisonal income tax cut eut "disappointing" to TORY OBSERVERS FORESEE MIKE'S ASCENDENCE Starr May Fall Heir To Leadership By FARMER TISSINGTON Ottawa Bureau of The Oshawa Times OTTAWA -- Elevation of Michael Starr to the past of Conservative house leader this week has given rise to speculation that the Ontario riding MP is John Diefen- baker's heir apparent. Conservative sources here dismiss the appointment as being 'merely routine" and refuse to attach any special significance to it. But man experienced observers see in the move another step, with Mr. Diefenbaker's biessing, y in Mr, Starr's climb toward the party top Coming as it has on top of his previous appointment house. Previously, he seem- ed comtem to enter the de- bating fray only on the rou- tine issues involving the La- as deputy house leader, his bor Department, which he election as caucus chair- headed as minister in the man and his selection as Diefenbaker cabinet. But seat-mate to Mr. Diefen- more recently he has been baker, the new post is re- rising with increasing fre- garded as an. important quency to question and to stepping stone to whatever heckle the Liberal cabinet further ambitions Mr. Starr may have Combined with this is the fact that the Ontario MP has been much more active in the past few months as an Opposition eritie in the ministers on a much wider scope MIXED BLESSING Mr. Diefenbaker has been careful in the past not to give any indication of his personal choice as the next party leader. In fact he has often given the impression that he has resented any colleague who even faintly suggested he might be inter- ested in succeeding him. But with his advancing age, a physical condition that is beginning to show signs of weakening, the embattled Tory chief may now fee] it is time to give some public indication. of the future of the party as he sees it If it is his intention to en- dorse Mr, Starr, this is 're- garded here as a mixed blessing. Mr, | Digfenbaker has only a slim hold on his party now and any hand- picked successor would auto- matically run afoul of those elements in the party which are now opposed to the pres- ent leader. But in the case of Mr. Starr, who must be regarded as a dark horse in | the leadership race at this point, any. boost of such magnitude would be help- ful as a starting point, it is believed SEE DEARTH OF TOP Continued em Page 23 |ting. the|/have an invigorating effect on /the business community later As one observer put it, para-|this year and running into 1966. |This is the time when many the late Mackenzie King during| economic forecasters predict a the Second World War conscrip-| decrease in the rate of growth tion crisis: An election if nec-|from the level of the last 12 to essary, but not necessarily an election 1/15 months Moreover, the finance minis- Mr. Gordon declined to asso-'ter is earnest and confident in ciate his budget reporters after speech in. the Commons "It's a growth budget," he said, 'I don't think we should consider tax cuts and elections in the same context," Senate-Retirement Pose : with election) his belief that anada will con- A. 0. Aalborg, Alberta provin-| prospects when interviewed by| tinue to grow and expand in the delivering his|longer-range future, For this | GORDON SLICES TAXES IN EXPANSION BUDGET Cuts Will Put $270 Million Into Spending This Year By STEWART MacLEOD OTTAWA (CP) Finance Minister Gordon brought down what he termed an expansion- ary budget Monday with a 10-| per-cent cut in personal income taxes and plans for the forma- tion of a billion-dollar develop- ment corporation. The tax cuts take effect July 1, so that the effective reduction in 1965 will be five per cent. Without tax cuts, he said, the budget would be a "restraining influence." So he put his main expansion- ary lever--the tax cuts--in the hands of the Canadian taxpay- ers who will have an additional $170,000,000 to spend this year and $265,000,000 in 1966, There were no other major tax changes in Mr. Gordon's third budget. The lower revenues from in- come. taxes will push the pre- dicted budgetary deficit up to $300,000,000 in the current fiscal year ending March 31, 1966. Last year he estimated that 1964-65 would end with a deficit of $455,000,000, but the boom- ing economy pared it to $83,- 000,000. The other key announcement in the budget involved plans to establish the Canada Develop- ment Corporation -- originally promised in the 1963 Liberal election campaign and revived in the recent throne speech. SHARES $5 EACH Mr. Gordon said the corpora- tion, with $1,000,000,000 worth of capital, will enable Canadians to invest $5 a share in Cana- dian business enterprises, Some Crown corporations, including profitable Polymer Corp., will be taken over by the new or- approach in our financial and economic affairs. Consequently this is a growth budget." But Opposition spokesmen didn't see it that way. "Practically meaning- less," said Opposition Leader Diefenbaker. "Tt is an abdication of respon- sibility," said Colin Cameron, financial critic of the New Democratic Party. Creditiste Leader Caouette said the tax cut was In' to fool the public, A married taxpayer with two children earning $3,000 would save only $3 this year. Secial Credit Leader Thomp- son said the budget was an im- provement, but he had hoped for a balance. 'TWO-BIT REDUCTION' Former Conservative finance minister George Nowlan said: "This is a two-bit reduction by the two-bit boys." The income-tax cuts repre sent the first reduction in the rates since the 1957 budget, Mr. Gordon said they would "'en- courage and stimulate our working force--including those in management and the profes- sions--upon whose efforts our prosperity and progress de- pend." After July 1, the 10-per-cent cut will apply in full to virtu- ally all taxpayers earning less than $20,000 a year. But be- cause the reductions are lim- ited to $600 in a full year, those earning above $20,000 or there- abouts will enjoy a smaller per- centage cut, Federal revenue from per- sonal income taxes will be lows ered by 12.7 per cent under the on arrangement, because the 10- ganization, jg{Per-cent, reduction is to apply Our national economy iSito individuals, in all provinces, moving ahead in a satisfactory way and we now are able to lead from strength," said Mr. Gordon, as he spoke to a sparsely-filled chamber of MPs and packed galleries, 'The times call for an expansionary regardless of the provincial in- come tax abatement, now 21 per cent. If this abatement was not SEE TAX-CUT BREAKDOWN Continued on Page 2 NEWS HIGHLIGHTS Firm Asks Strike Be Declared Unlawful TORONTO (CP) -- Beatty Bros, Lid. has asked the Ontario Labor Relations Board to declare unlawful a strike by Local 3789, United Steelworkers of America (CLC), at reason he is certain that invest- ment in the new Canadian De- velopment Corporation will pay | substantial returns in the long} its Fergus plant. Alternatively, the company has asked that a sympathy strike by factory workers be declared unlawful. run, Opposition Riddles Move By STUART LAKE OTTAWA (CP) A government resolution pro-) Se Govern-|poses to retire all new senators | 40 Cars Derailed, No One Injured NORTH BAY (CP) -- About 40 cars of a Canadian Pacific Railway Montreal-bound freight left the tracks early today about 15 miles east of North Bay, No serious injuries were reported but CPR Regional Superintendent ment views on how to reformiat age 75. Senators past the age| |the Senate were run up the par-|limit pole Monday./seats in the 102-member House} the|could either continue their life | liamentary They came flag down -- much and already occupying | ° worse for wear after a two-hour terms or accept $8,000 pensions, | Debate on the resolution is to debate. The problem of Senate reform --almost as old as the Senate| itself--was business . the Commons after its ll-day Easter recess Finance Minister Gordon's budget speech took the Com- continue today. The government the first piece of|cut any ice with New Demo-|~ faced|cratic MPs who want the upper done away chamber plan with --al- together. But they also attacked the mons spotlight at the night sit-|that the $8,000 pension was a} 1 didn't| | resolution on the grounds} lbribe to get Senate approval. |i Lionel Morey said the line may not be cleared until Wednesday. ...In THE TIMES today... Decision On Sewer Policy Expected Tuesday---P. 5 1964 Rally Champions Are Still In Front-----P. 6 Ann Landers----11 Obits--19 s City News--9 a ha 4 yl ; elevision-- . | Classified----16, 17, 18 Thaniee---19 4 Comics--15 Whitby News---5 q Editorial-----4 Women's----10, 11, 12 + a Weather--2 Financial---19 he