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Ontario businessman predicts Canadian bankruptcies may top US numbers EDMONION itPi Bankruptcies III fanada this year will equal or tched those in the an Ontario businessman predicted Wednesday George Sinclair chairman of Sinclair Itadir Laboratories Ltd in foncord Ont said bankruptcy trends contradict Prime Minister tlarks statement that Canadian business is tinw llllItL to take risks While lark ctittci7ed fanadian business on thost grounds in Toronto speech month ago bankruptcy totals were mounting last Sinclair told Financial Post conference on business innovation In 1976 anada had 2000 bankruptcies cotttparcd withil200 iii the with 10 times the population and economic activity Canadian bankruptcies grew to 4100 in I97 and 5100 in mm while the tiguros dropped to900 iii iti77ztnd then 63000 last year Does that indicate that anadians are unwilling to takerisksSinclairaskeil au av Not just hewer of wood Japan buys lot more goods from Canada than Statistics Canada figures show Mamoru Iwamoto of Japan Trade Centre says He doesnt think Candda is just hewer of wood and drawer of water CP Photo Another look How long will oxygen hold Hy lllilS GREENWOOD This coinpartttg tttflato to ati evergrowing bttbble that evettlually ituist burst is not really an accurate analogy More accurate would be to Itkeii the spending of govern tttettts to pumping more attd more ltot air ittto balloon The more hot air it gets tlte higher goes the balloon And hooked onto it are all of its wttether we opted for tlte ride or not As we go higher attd higher into tlte rartftcd air of depreciated dollats we begin to run short of oxygen lit this case dollars We catt call tltettt oxygen dollars it you like better still Soxygen We cattt get enottgh $ov ygctt to live And when that happens of cottrse we sit locate Die The captain and crew however ltave their own Soxygen supply So theyre all right Jack tliattk yoit And the captaiti and crew of course are our high placed leaders aitd civil servants So tltey really dotit care Itow high they go They can always vote thetttselves tttore Soxygen What lovely view is abottt all that stirs them We ought to en joy it too they say MAY iEl ANGRY Well whett youre gasping for Soxygeit your eyes start to bulge attd youre probably blitid before your friendly tour guide even ttottces If the captattt does happen to have it brought to his attention probably becatise someone men tiotts to liittt that the passengers might get little angry if he keeps going higher attd higher theti his first thoughts are how to get the poor suffocating passengers ttot to breath so much All right Lets eottte dowtt to earth now attd take look at just exactly ltats been gotttg oti and ttas been for the last Lordknows when Suppose all the money we had iii the country were made of solid gold And suppose every time it went titto bank the batik pared cltip off the edge of ottr gold coins first nobody wottld ttotice it of cottrse ithats wlty tltey ptit serrated edges on coins after Willlt but then someone realtcs whats goingoit He now wants coitt and bit for the debt you owe hint or the wage hes eartied Soon he needs two bits And pretty soon ltes going to ask for two coats ttt payment for the one he leitt you In other words money Itas been gctt tttg worth less aitd less The government and batiks have literally been stealing your money by the process of reducing its altte leSt so they could pay somebody but didnt have enough money coming in to meet their debt They call it their budget The way its actually dotte is the govertttttent wants sottte money from the central batik that the govertttnent doesnt have in the bank so the government issues what are called treasury certificates lrittts them that is Just like forger with his basement printtng press The gowrnmcnt then hands these certificates oi er to the batik attd the bank ac cepts them as money ults been called legaltxed crime by ome observets Then the batik can me clteck on its own tccount so that it can then lend the government the money it wanted Whats billion Just few letters of cold type hats all All right Iltctt the central bank offers these cer ificates to all the other banks fter all the central bank tas to lav off as tti booky all that do rey ttte So the banks buv some atid pttt it tti their vaults Now as soon as they to that it becomes an asset which allowed them to write check for it in the first place Just like the government Vow what happens is here we caitte iii The bank normally nakes loans to its customers based on the tact that even hough the bank only tias say $5 cash ttt its vaults it can by my lend out $100 You see most people keep their money iti he batik so thats how the banks cati stay tit business men hough they make loans with money they dont reallv have so now dont you see the goyeritmettt cries llorrots nflatton Stop hotrowing spending so tttttch money Or our balloon Stop breathing so much $oygen Theyre ttill issuing their worthless certificates tit coutse Pump iii in tlte hot air Oh sure Hit to make El lldltl tor the Honey to get pared ttttlated they tell the banks to emrge nore ttiterest There High ttnancc itt one easy column Read it again last and youll get it clear as the blue sky He said the real reasons for lack of innovation and entrepreneurship in Canada are heavv taxation and lack of incentive Because there is no innovation in the business en vironment Sinclair said Canada can not build up the industries of comparative advantage needed to compete under planned freertrade rules HIMITTINGSlltllE Weare clearly committing economic suicide bv removing our tariff barriers before making certain we can produce in sufficient quantity the necessary industries of comparative advantage Supporting arguments came from John Shepherd president of the Canadian Institute for Economic Policy who said government policies on trade and in novation are backward Shepherd said government incentives encourage any technological development while the emphasis in the examiner Friday Nov 1979 should be on meeting market demand Shepherd also criticized the government for trying to promote exports instead of limiting imports Were concentrating on the wrong problem This country exports very well The trouble is that it im ports better By encouraging Canadians to produce goods now imported he said Canada could improve its balance of payments and achieve more domestic growth than by pushing exports The Ottawa economist argued that much of Cana dian research and development effort has been distorted by the CanadaUS defence production sharing agreement which led Canadian research into narrow fields It would be better Shepherd said for Canadian research and innovation to focus on Canadas strength as resourcebased economy Shell says itll spend $6 billion exploring matnder WIll be on Oil products and chemicals Acknowledging that profits have gone up substantially this year Daniel said return on investment had been only an average eight per cent the previous five years and was insuffi cient for extensive exploration and develop ment Asked how high Canadian oil prices should Shell whose ninemonth earnings increased thtehsaldhhe to $1623 million front $105 million year eys earlier will direct the program mainly toward conventiottal anadian oil and gas exploration aitd development and oilsands recovery Iprcnditures for next year including in creases in working capital should total more than $700 million about 50 per cent more than the anticipated 1979 total Defending the companys increased earn ings Daniel said the $7titimillion expenditure next year would represent to three times the likely level of 1979 profits The companys reinvestment as percentage of cash income OVer the sevenyear period is expected to be close to 100 per cent In addition to internallygenerated funds Shell will have to raise money on financial markets to carryout the $6billion program STRESS RESOlRES More than 70 per cent of the program will be concentrated on resources largely for conven tional oil and gas in the producing areas of Western Canada andon development of oil sands and coal production Most of the re Putting sign in its place Wilf Trivett left and Mike Ruddick right who work for AnnisWay Signs of Orillia install the sign for the new Midas Muffler shop on Bayfield St The sign went up before the building did Ex aminer Photo TORONTO 4Ii Shell Canada Ltd said Wednesday it will spend about $6 billion on ex ploratiott and capital investment projects dur ing the next seven years President William Daniel told nch con terence the planned expenditures are about $2 billion more than the company earlier estimated it would spend during that period WW2 Automated computer banking going great guns in Barrie system offers service to all Toronto Dominion customers regardless of where their branch is said Logue To operate the system customers can use either special Green Machine card or Toronto Dominion Chargex card with Green Machine privileges This Offers access to savings and chequing accounts as well as Chargex accourtt Customers can have as many as four accounts oti their cards said Logue and they need not be at the same branch We should strive to reach no more than the competitive equivalent of the Chicago price by 1984 The Canadian prices should probably go up by $4 to $5 barrel year The Chicago price now is nearly $8 higher than the Canadian price He said it is possible but not probable that Canada will become selfsufficient in energy by 1990 as the government has said it should be Asked whether PetroCahada the Crown owned oil company should be turned over to the private sector he said if it is it should not be complicated by government policies If the government wants to remain involved in some way such as negotiating between countries it should do so as separate agency And if PetroCanada is to remain govern By RICHARD THOMAS Of The Examiner SinCe it opened in Barrie week ago the Toronto Domi nion Banks Green Machine at the Bayfield Mall branch has been going great guns says the branchs manager Although no statistics on the number of new accounts are vet available the branclt has had tremendous response lo the automated teller machine system said Jack Logue Logue said the branch had been making its own customers aware of the machine for sometime but the Green Mchinc has attracted new customers who witnessed demonstrations of its functions last Saturday at the mall Several people who inquired about the service but could not use it because they used different bank came in the following Monday and transferred their accounts to the ment company it should be subject to the same Toronto Dominion branch so they could make use of the rules as the private companies It should not Green Machlne Log Said have competitive advantage over the KT 13 BARR others The first of its kind tn the Barrie area the automated The Green machine also allows customers to withdraw cash up to daily maximum limit make deposits in cash or by cheque transfer funds between accounts obtain Chargex cash advance make payments to their Chargex ac count by cash or transfer of funds from any account and pay their utility bills as well Other banks have come out with some automated systems which simply dispense cash Legue said whereas with ours you can virtually do 90 per cent of your banking right there at the machine Import ceiling may meet Gradual rise helps economy Oil price increases healthy QUEBEC CPI Gradual being raised suddenly to make Ulasis Ramirez of the V0 but substantial oil price in creases can help the world achieve more satisfactory economic order an inter national symposium on energy economics was told Wed nesday Speakers agreed oil shor tages and unstable increases are inevitable unless price adjustments are planned more carefully Pierre Desprairies president of the French National Petro leum Institute said oil prices should be tied to industrial price increases rather than up ground lost to inflation Adnan AIJanabi head of the economics and finance depart ment of the Organization of Petroleum Exporting Coun tries said inflation and switch to different types of imported goods had pushed up OPEC countrics unit import bills by 224 per cent in five years We have to keep running just to stand still he said adding that even Saudi Arabia the worlds biggest oil exporter suffered deficit on its total trade balance in 1978 n1 nezuelan oil ministry blamed economic mismanagement in industrialized countries for the near breakdown of the inter national monetary system and he called on Western countries to alter economic structures that for the last halfcentury have been based on the avail ability of cheap oil Importing countries will have to devote more capital to devel oping other energy sources attd will have to bear in mind that conservation is the cheapest source of energy reserves emerging nation threat TORONTO tCP Canadas autontotivc parts industry was told Wednesday that an import ceiling maybe one way to meet the threat of competition from emerging industrialized nations such as Brazil and Mexico Rodney 1e Grey Canadas chief negotiator at the recently concludcd General Agreement on Tariffs and Trade talks in it Set up pe maet quarters Geoffrey Joyner director of Sotheby Parke Bernet tries out ISOyearold Egyptianstyle day bed at his companys new permanent quarters in Toronto Sothebys the worlds largest auction house had previously been operating out of the small sales room in downtown hotel CP Photo Geneva also said the industry might consider advocating lint ited access of auto parts from these nations under general system of preferential rates But that will cost you he told the fall conference of the Automotive Parts Manufac turers Association of Canada Michael Wilson federal min Underwater robots to US Navy VANCOUVER CP Port Moody BC firm world pio neer in development of un manned submersibles has adapted one of its underwater robots for the US Navy THOV for tethered remote operated vehicle was put through its paces at the bottom of Vancouver harbor this week tti preliminary trials Operated by remote control from ship on the surface the $600000 de vice is equipped with video equipment and four mechanical mandibles for performing un detwater Chores such as to trteving torpedoes International Submarine En gineering Ltd founded years ago by engineer Jim McFarland now company president had previously concentrated on developing submersibles for the offshore oil industry Twentytwo of the companys vessels are at work in the North Sea and in the Australian Trench inspecting underwater pipelines drilling platforms and wellheads and doing surveys of the ocean floor They can also be used under ice making them suitable for petroleum exploration in the Far North ARRY RE Because submerstbles do not carry crew theyre relatively small and can be economically produced and shipped The Canadian firm has SUlJSIv diaries in Britain Houston Tex and nearSeattlc Wash The 3601ypound Zzmetr military model will undergo further trials this month at the 1000metre level before delivery to Navy base near Seattle ister of state for international trade said the Germans have established Volkswagen plant in the and It wont be too long before we see either Honda Toyota or Nissan start ing up an assembly operation in North America Because of the lowervalued Canadian dollar and expertise here he said European and other foreign manufacturers are finding that Canada can be more economical source of parts than local purchase There are opportunities in these third countries that we cannotafford to pass up Wilson said that when foreign manufacturers move into North America they will tend to look to established parts suppliers many of whom have been Cami dian Canadian companies which have been supplying them in their home countries will have afoot in the door To help this development Ot tawa has approved plan to ex pand the remission scheme which provides duty rebates to foreign manufacturers related to the value of Canadian con tent in vehicles they sell in Can ada Wilson congratulated the delegates saying trade figures show Canadian penetration of the US market was up in the first quarter of the year DOllors and Sense Oil companies may go abroad By RALPH ALEXANDIIH Dear Sir In view of the huge profits being reported do the large US oil companies represent timely investment TY Dear The Li President and the Congress are about to propose cure for which there is no known disease These politicians are being asked to choose between larger domestic production of oil and restricting Oil company profits The consensus scents to be that the politicians would rather have their constituents freeze in the dark than see the shareholders of Exxon make large pro fits on domestic operations As you have noted the international Oil companies are repor ting sharply highcr profits for 1979 These higher profits result almost totally from international activities The profit margins for domestic operations did not increase to any extent The politicians response to this development ibeSides turning blue in the face has been to propose to implement what they call an excess profits tax on any increased profit margins resulting from allowing domestic prices to increase towards world price Somehow they feel that this will help solve Americas dependency on foreign sources of Oil Of course it will be totally counterproductive Already as is shown by the excellent profits that these companies can earn abroad it makes more sense to invest abroad than in the CS EXPLORE ELSEWHERE By taking steps to decrease the potential profits to be earned in the they are in effect ordering any rational oil company executive to allocate his exploration budget abroad When this happens President Kennedy tGod forbtdii WI scream blue murder and threaten to nationalize crimtnaltze or otherwise the Oll companies This wont solve the problem of course but it will make the market value of the Oil companies decline This may be overly pessimistic but with several other stock groups available at bargain prices without the politcal dangers involved with the oil stocks see no reason to risk investing in them would not advise any purchase of stocks until interest rates begin to decline