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News summary Canadian Pacific. Public Relations & Advertising Feb 28, 1979

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 News Summary
News and views on topics of
current interest prepared by Public Relations
and Advertising Department
Vol. 35 No. 5 Feb. 2, 1979
Aviation
Business & Finance
Highway
Pipeline
17
22
21
18
Railway
Shipping
Telecommunications
Tourism & Travel
5
19
20
18
GRAIN-HANDLING PROBLEMS
A leading Prairie newspaper, reviewing a meeting in Winnipeg of
the principals of the grain-handling industry, reports that it
didn't really solve any of the problems, but identified a few
and made some positive steps towards eliminating them.
Page 5
BRANCHLINE ABANDONMENT
Despite some controversy, there appears to be agreement with the
Prairie Rail Action Committee's recent strong and well-documented
recommendation that a substantial mileage of rural branchlines in
the West's grain-gathering system should be abandoned.
Page 8-10
RAIL-LINE IMPROVEMENT
The expansion of the port of Prince Rupert to handle more grain
exports will require a commitment by CN to build new sidings and
improve the roadbed through the mountains. The Government also
insists that CP Rail move grain on CN's tracks to Prince Rupert.
Page 10
TRENDS AND TOPICS
The Wheat Board has formed a task force to study the possibility
of interchanging railway company grain cars at export elevator
terminals. Elevators traditionally are served by only one railway.
Page 11
The chairman of Canadian Pacific, Ian Sinclair, says he is opposed
to proposed legislation that would prohibit officers and employees
of Canadian banks from sitting on his company's board of directors.
Page 22
From a surge in travel generated by cut-rate air fares, a major
influx of foreign visitors and a boom in the convention and conference business, U.S. hotels are hanging up 'No Vacancy' signs.
Page 18
Canadian Pacific
 NEWS IN BRIEF
VITAL STAGE FOR RAIL TALKS
TORONTO - Contract negotiations for 95,000 railway workers should enter
a crucial phase this weekend as representatives from seven unions meet
with CN and CP Rail negotiators to hammer out details for a new settlement.
The companies will likely be presenting the various unions with their
first counter-offer. The railway workers are seeking double-digit wage
increases in a general framework agreement. If the framework is to the
unions' satisfaction, then negotiations will begin in earnest as details
are hammered out. If not, then it's likely talks will break sharply and
prospects of a strike would increase. Early this week, members of one
union negotiating team were split on whether negotiations will go smoothly.
The longer the negotiations last, the greater is hope for a strike-free
settlement.
(Financial Post, Feb. 3)
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PROFIT CLIMBS $108-MILLI0N FOR CN RAIL
TORONTO - CN had a profit of $136-million in 1978, compared with $28-million
in 1977, according to Robert A. Bandeen, president and chief executive
officer. He said profit in the fourth quarter of last year was $33-million,
compared with $25-million in the corresponding period a year earlier.
Mr. Bandeen said about $60-million of the 1978 profit rise reflected
savings in interest charges, which resulted from the passage in Parliament
of the CN recapitalization bill last June. However, this was partly
offset by an additional $20-million payment to the CN pension fund.
(Globe and Mail, Feb. 1)
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AIR CANADA PAYS DIVIDEND
MONTREAL - Air Canada has declared a $13.2-million dividend for its only
shareholder, the federal Government, based on a record after-tax profit
of about $47-million for 1978, Claude Taylor, Air Canada president,
says. The dividend, the first paid by the airline, represents a 4-per-cent
return-on-investment for the Government, which has more than $330-million
invested in the national carrier, Mr. Taylor said. He also said the
airline is projecting a 1979 profit of about $60-million.
(Globe and Mail, Feb. 1)
PRICES RAISED 6 PER CENT BY ALGOMA
TORONTO - Structural steel prices have been raised 6 per cent by Algoma
Steel Corp. Ltd. of Sault Ste. Marie, Canada's principal supplier. The
increase is effective Jan. 14, 1979.
(Globe and Mail, Feb. 1)
 PAN AM QUITTING AS IATA MEMBER
TORONTO - Pan American World Airways Inc. of New York is resigning its
membership from the International Air Transport Association, effective
March 31.
(Globe and Mail, Feb. 1)
TASK FORCE WILL EXAMINE VANCOUVER GRAIN SHIPPING
WINNIPEG - A special Task Force will be created to deal with all the
aspects of grain movement via Vancouver, including a look at labor problems at West Coast terminals which have put a crimp into Canada's
grain-exporting effort. Transport Minister Otto Lang told a press
conference in Regina that any problems being encountered in grain movement
are being monitored to see how they affect the overall system.
(Winnipeg Tribune, Jan. 29)
CROW RATES DIVIDE AGRICULTURAL MEETING
REGINA - Delegates to the Western Agricultural Conference passed a
carefully-worded statement Jan. 26 in an effort to patch deep divisions
that emerged in the conference over what to do with the Crow's Nest Pass
freight rates. The Saskatchewan Federation of Agriculture was strongly
opposed to a move Jan. 25 by the Manitoba Farm Bureau and Unifarm, the
Alberta umbrella organization for agricultural groups, to see the low
statutory Crow rates on grain increased so farmers would pay more of the
cost of moving grain.
(Winnipeg Free Press, Jan. 27)
EXPANSION HEARINGS
CALGARY - The Alberta Energy Resources Conservation Board is expected to
approve an $185-million expansion program for the world's first commercial
oil sands operation at Ft. McMurray, owned by Great Canadian Oil Sands
Ltd. The Board begins hearings at Ft. McMurray Jan. 30 on the application
to increase synthetic oil production by about 12,000 barrels a day.
(Calgary Albertan, Jan. 30)
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KAISER RESUMES COAL SHIPMENTS TO MEXICO
OTTAWA - Kaiser Resources Ltd. of Vancouver has resumed shipments of
metallurgical coking coal to a Mexican steel mill after a temporary suspension of deliveries that had lasted more than a year. Kaiser, the
only Canadian company now supplying coking coal to Mexico, is hoping its
on-going relationship with the Mexican steel mill will give it preferential
access to any future contracts for additional coal exports to Mexico.
(Calgary Albertan, Jan. 30)
 COSTS OF OVERPASS, MOVING CP RAIL YARDS "ABOUT EVEN"
WINNIPEG - The city's transportation head says moving the CP Rail yards
from downtown would cost no more than to build bridges spanning the
yards over five years. Harry Burns, director of Streets and Transportation,
told the Civic Works and Operations Committee Jan. 29 that he estimated
the city would spend more than $32.5-million to construct the Sherbrook-McGregor
overpass, replace the 68-year-old Arlington Street bridge and rebuild
the 47-year-old Salter Bridge. "You would about break-even," said
Burns.
(Winnipeg Free Press, Jan. 30)
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BCR CARLOADINGS HIT RECORD HIGH
VANCOUVER - Carloadings on the B.C. Railway hit a record high of 154,850
in 1978 compared to 152,597 the previous year. Lumber, pulp and wood
chips accounted for most of the increase in traffic.
(Vancouver Express, Jan. 29)
* * *
PROGAS SIGNS PACTS WITH FOUR COMPANIES FOR EXPORTS TO U.S.
OTTAWA - Progas Ltd. of Calgary has signed contracts with four large
U.S. gas transmission companies for export sales totalling 300 million
cubic feet a day for an initial five-year period, beginning in 1980, and
for steadily-declining volumes for the five years thereafter.
(Calgary Albertan, Jan. 26)
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PWA 'ECONOMIZER' FARE PLAN
TORONTO - Pacific Western Airlines Ltd. and its subsidiary Transair Ltd.
have announced an economizer fare plan the companies hope will help fill
empty seats on western Canadian routes. A PWA spokesman said discounts
of 25 to 35 per cent will be offered. Flights have to be booked seven
days before travelling and the ticket purchased seven days following
booking of the flight. The traveller must also stay over one Saturday
night before returning on the ticket.
(Globe and Mail, Jan. 27)
X X X
AAA
RETHINK ST0L PLANS, SEWELL SUGGESTS
TORONTO - Mayor John Sewell has urged city businessmen to reconsider
their support of short-takeoff-and-landing services at the Island Airport because it is a "waste of scarce tax dollars." Mayor Sewell said
Toronto City Council will continue to oppose the proposed STOL service
because it doesn't make economic sense, and encourages development
options that are not in Toronto's best interests.
(Globe and Mail, Jan. 30)
 RAILWAY
MANY PROBLEMS INVOLVED IN IMPROVING GRAIN SYSTEM
REGINA - Up to Jan. 9 there had been a remarkable lack of consensus
about what to do to repair the situation of lost grain sales, but on
that day the principals of the industry emerged from a two-day closed
meeting in Winnipeg with a number of points of consensus.
The meeting really didn't solve any problems, but it identified a few
and made some positive steps towards eliminating them, which is a lot
more progress than many people had expected.
In their communique and news conference after the meeting, the three
premiers of Manitoba, Saskatchewan and Alberta and Transport Minister
Otto Lang identified the following points of agreement:
1. A "psychological breakthrough" in that the industry participants
agreed Canada could be exporting 30 million tonnes a year of grain
by the mid-1980s, or 50 per cent more than it presently exports.
2. A censensus that West Coast terminals are a serious bottleneck in
the system and therefore in need of expansion. A decision was
virtually made to build a new terminal at Prince Rupert (by a
consortium of the grain companies), a move that was sweetened by
Premier Peter Lougheed's offer of a $100-million loan from Alberta's
Heritage Fund to the project.
3. An apparent decision by CP Rail to repair 1,000 boxcars for use in
grain hauling, and an agreement between CP Rail and the CN to study
allowing CP Rail cars to move on CN's line to Prince Rupert.
4. The formation of a committee involving the federal labor department,
the grain-handling unions and the grain companies, which will meet
in the near future to discuss ways of sorting out the labor-management problems which in the past have plagued the industry.
The problem basically is that the grain-handling system needs to be
rebuilt from top to bottom, or more precisely from the farm gate to the
export terminals. That involves upgrading the prairie elevator system,
the prairie rail network, the rolling stock used to move grain to the
terminals, the rail lines to the West Coast, and not least, but perhaps
most important: a viable terminal system on the West Coast.
While Lang paints a picture of the system merely "creaking and groaning"
under its present load, the fact is that the system is stretched to its
limit now and will be even more taxed if the trend to increased crop
sizes continues. As the meeting agreed, there is every reason to believe
this trend will continue.
The key question is: what should be done to improve the system?
To begin with, the 3,500 country elevators in the Prairies must be
upgraded. Many of them were built in the 1920s and now are creaking and
groaning under the strain of record crops. The objective is fewer but
better elevators.
 But the work on country elevators cannot begin in earnest until the permanent rail network is defined. The branchlines serving the elevators
also are somewhat antedeluvian, and in some cases redundant. Thus the
Hall Commission report released in 1977 studied the whole system and
made recommendations on which lines should go and which should stay.
However, that commission left a large number of lines in limbo. Their
status was to be determined by the Prairie Rail Action Committee (PRAC),
whose report was released Jan. 15 by the federal Government, after a
long delay. Now, public hearings will be held on the lines recommended
for abandonment.
Former PRAC Chairman Fred Anderson hinted at the content of his report
at the recent Palliser Wheat Growers Association meeting in Regina. He
said that "truck haul of grain is always, in every circumstance, cheaper,
much cheaper, than light-density branchline rail haul." In other words,
a lot of the little lines must go.
That means farmers will be doing more trucking of grain to fewer but
larger elevators, gaining efficiency in the system but costing farmers
more money, and annoying the provincial governments which then would
have increased road-maintenance costs.
In any case, the prairie rail network must be substantially improved.
The federal Government has recognized this and implemented a 10-year
program of subsidizing the work. Significantly, the program so far has
escaped cut-backs. Lang announced shortly after the Hall Report release
that $100-million would be spent to March 31, 1979, and last year he announced $75-million would be available in 1979-80. Prairie Liberals
favor a total 10-year commitment of $600-million, which must be split
between line work and car purchases.
Then the railway rolling stock allocated to the grain trade must be improved. CP Rail has about 12,000 grain cars in its fleet, and the CNR
has about 10,000. As well, the federal Government loans them about
8,000 cars. However, the railways' cars are going out of service at a
rate of 1,800 cars a year because they are reaching retirement age (50
years for CNR and 40 for CP Rail).
Once the rolling stock is available, the next step is to get them to
export position, and particularly to Vancouver because that port is
becoming the most important outlet as a result of large grain sales to
Asian countries.
The first constraint here is getting the trains through the mountains.
That is not as much of a problem as many people believe. The existing
capacity is adequate for present grain volumes, even with the increased
competition from potash, sulfur, coal and wood shipments. However, at
some point in the future there will have to be improvements in the system through British Columbia, such as double-tracking wherever possible,
and longer sidings where it isn't possible.
To this point, a lot of the onus for making the improvements falls on
the railways, and here there is a major problem because the railways are
required by statute to haul the grain for less return than it costs them
to do it.
 Since the railways lose money hauling grain, they understandably have
not spent the money required to maintain their part of the system. As a
result, the federal Government has begun subsidizing the railways' cost
out of its general revenues, thus continuing to shield farmers from the
full transportation costs, but the subsidy still is not providing the
railways with a profit.
"We absorb 49.6 per cent of the total operating cost of shipping grain.
The total operating cost is $354-million a year. The railways put up
$175-million, farmers $115-million and the federal Government $64-million,"
a CP Rail official recently was quoted as saying.
Rail transportation is not the most serious constraint in the grain
industry. Instead it is the grain terminals' capacity at the West
Coast. The railways say they have been delivering enough full cars to
the elevators, but they have not been unloaded as fast as they have been
delivered. Thus empty ships wait in Vancouver, collecting demurrage
fees from prairie farmers, while full grain cars wait on sidings between
the prairies and the coast. This bottleneck is mainly what has caused
the lost sales, though the grain companies — including the farmer-owned
co-operatives — deny they are the problem.
There are constraints on the railways in the Vancouver harbor area, such
as level crossings which can't be blocked, bridges which must open to
let ships pass, and tunnels that can't be double-tracked.
But there are more constraints within the elevators. First, their
grain-drying capacity is not sufficient. Large amounts of the recent
record crops have come in damp and must be dried before loading on a
ship. This problem could be eased somewhat by drying more grain at the
five large Government-owned inland terminals on the prairies, but those
are under-utilized and furthermore in the process of being sold to the
private sector, victims of Ottawa's cut-back program.
Second, the terminals have had difficulty keeping track of the many
different types and grades of grain which are exported, a problem which
also hits the country elevator system. The grain companies are not
entirely to blame, since the railways and CWB also participate in grade-
sorting, but the problem could be eased by again using the inland terminals
to clean and sort grain before it reaches export position.
Finally, the hours of work at the coast terminals is a problem, part of
the overall poor labor-management relations. It seems strange, but in
the face of intense demand for exports, the companies and unions have
not been able to operate around-the-clock, seven days a week. Now they
work two shifts a day, five days a week.
Construction of a new terminal at Prince Rupert should take a lot of
pressure off of the Vancouver port.
Above those problems, including the terminals problem, is the question
of price. Now the international price is not high enough to cover the
production costs of all farmers, though large farms with good crops can
make a profit.
 The problem is a short-term glut of grain on the world market. While
Canada has had record crops, so too have the other major exporters,
mainly the U.S., but also Australia and Argentina. As well, some of the
traditional importers such as China and U.S.S.R., also have had adequate
crops, though there continues to be a narrow margin between annual world
consumption and production.
A substantial increase in the selling price of Canadian wheat would do
wonders for the system. It would make the massive expenditures needed
to upgrade the system a lot easier, for example. But right now the
world grain market is a buyer's market, and at the very least that is
untimely for Canada.
Thus, at present, Canada is sitting with a large (for Canada) surplus of
grain, and the likelihood of more large crops coming in future years.
Meanwhile, its handling system is inadequate to cope with the volumes,
and thus even the export sales at bargain-basement prices are being
lost. In a word, it's a mess.
(Regina Leader-Post, Jan. 20)
BLOW AWAY EMOTIONAL MIST OVER RAIL ABANDONMENT
REGINA - There's an old saying that you can't make an omelette without
breaking eggs and if one isn't prepared to break enough eggs, the omelette
may be a flop.
That's the crux of the controversy currently swirling around the Prairie
Rail Action Committee's recent strong and well-documented recommendation
that a substantial mileage of rural branch lines in the West's grain-
gathering system should be abandoned without delay.
The objective is to end the suspense over abandonment, view the advantages
and disadvantages of retention or cutting out realistically in relation
to current efforts to improve Canada's overall grain-transportation
system, and bite a bullet that many say has stayed unbitten for much too
long.
The grain companies and co-operatives on the prairies cannot take sound
steps to rationalize the country-elevator and delivery-point system
until the suspense over abandonment and retention is removed, once and
for all.
The railways may have a lot to answer for in relation to the present
overall condition of the system, but there's an argument to be made,
surely, that requiring them to continue to service and maintain rural
branchlines that have become economic anachronisms in the evolution of
modern farming hinders more than it helps.
It's time for all concerned to blow away the emotional mist obscuring
the real rationale behind this latest attempt to bring a contentious
issue that has retained an aura of myth and misunderstanding for decades
to the decision point.
(Editorial, Regina Leader-Post, Jan. 19)
 PARTS OF REPORT OFFENSIVE: POOL
WINNIPEG - The Saskatchewan Wheat Pool has described sections of the
Prairie Rail Action Committee report as offensive and insulting. Furthermore,
the Pool's board of directors said in a press release there are inconsistencies in approach and indications of a lack of good judgment in
many places.
"Our task now is to present views on behalf of members to the Canadian
Transport Commission, which will make the decision on what rail lines
are retained," the statement said. The Pool board reviewed the PRAC
report Jan. 19.
The Pool directors said they are offended by the report's contention
that "the retentionist picture of prairie society seems to be one of
static decay, a picture of an indigent prairie grain industry served by
dying towns, locked into a fixed and obsolete technology of production
and transport."
The Pool said one of the serious flaws of the report is that while it
agrees with industry predictions of rapidly-expanding grain production,
its recommendations don't provide properly for getting that production
to market.
(The Western Producer, Jan. 25)
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FARMERS REQUEST POOL TO CO-ORDINATE CAMPAIGN
REGINA - The Saskatchewan Wheat Pool has been asked to circulate a
province-wide petition calling for return of all domestic feed grain
movements to jurisdiction of the Canadian Wheat Board.
A group of "concerned farmers" wants the Pool to co-ordinate the petition
campaign through its local district committees.
Art Bonstrom of Perdue said many farmers feel they are losing delivery
chances for Wheat Board grain due to heavy volumes of non-Board grains
going through the grain-handling system.
(Regina Leader-Post, Jan. 22)
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RAIL ACTION REPORT ON RIGHT TRACK
WINNIPEG - The Prairie Rail Action Committee Report's increased emphasis
on trucks and roads for short and medium grain haul should be well
accepted generally in the business of growing and gathering grain. The
savings possible by dropping least economic rail branch lines are just
too good to ignore.
Published data support the report's position that the cost of moving
grain marginally further on roads is much less than on the rail branchlines
that the PRAC has recommended be abandoned. This is one reason that the
 10
Palliser Wheat Growers Association has good things to say about the
report despite the fact some of its members would have to drive further
to deliver their crops if the Canadian Transport Commission acts on the
recommendations.
Trucking grain can be less than the cost of rail upgrading by as much as
a dollar a bushel, according to a study of one line which influenced
Palliser thinking.
And for provincial and municipal governments worried about detrimental
effects to roads there is a recommendation for federal road assistance.
Lacking evidence to the contrary, it seems decision-makers will generally
accept the report's finding that preservation of branchlines does not
preserve small communities. It is already obvious that good train
service isn't possible on grain-only lines where the railways lose money
and export movement of grain is frustrated in the process.
It would be an error to think that the railways would gain directly from
being allowed to abandon some branchlines. Where grain formerly delivered
to a subsidized line is switched to a mainline lacking federal support,
there could be some short-term adverse effect.
The railways still have the basic problem of unprofitable grain-hauling
under the statutory Crow's Nest rates. This low-revenue problem was not
part of the PRAC study, and remains to be solved before the railways
will be able to assure top service to the grains industry.
(Winnipeg Free Press, Jan. 19)
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RAIL REPORT CRITICIZED
REGINA - The report of the committee studying rail-line abandonment on
the Prairies is both arrogant and abrasive, Ted Turner, president of the
Saskatchewan Wheat Pool, said Jan. 19.
Turner told a news conference the Prairie Rail Action Committee had
apparently decided to abandon 60 per cent of the rail lines under its
review before it ever started and had issued a report which suggested no
one could question its approach.
The committee, under University of Regina professor Fred Anderson, was
set up to consider rail lines left in the undecided category by the Hall
Commission on Grain Handling and Transportation.
(Edmonton Journal, Jan. 20)
CP RAIL WILL MOVE GRAIN, SAYS LANG
CALGARY - The federal Government will insist that CP Rail move grain on
CN tracks to an expanded port of Prince Rupert, Transport Minister Otto
Lang said in Calgary Jan. 19.
 11
Lang said sharing the line is not the contentious issue some critics of
CP Rail have made it, although "there are some difficulties with the
financial arrangements."
Asked by reporters whether the railways will guarantee to share the
line, the minister said "we'll make sure it will happen."
Railway officials at a conference on grain handling in Winnipeg last
month were grilled over the companies' refusal to run CP Rail cars on
the CN tracks to Prince Rupert. The officials replied that they were
losing money because of low, statutory grain freight rates and didn't
want to add to their losses by increasing grain traffic on the line.
Lang said proposed expansion of the port of Prince Rupert will require a
commitment by CN to build new sidings and improve the roadbed through
the mountains. The greater capacity will be needed to handle increased
coal and grain shipments through the Pacific port, he said.
The Alberta government and the Canadian Wheat Board have said they would
be willing to provide up to $100-million to finance the Prince Rupert
expansion.
Lang told a luncheon meeting of the Calgary Men's Canadian Club that
grain production in the next six years will increase by 50 per cent to
30 million metric tons, and the rail system must expand to meet that
challenge.
(Calgary Herald, Jan. 20)
XXX
AAA
WHEAT BOARD TO STUDY SWAPPING OF BOXCARS
REGINA - The Canadian Wheat Board's senior transportation committee has
formed a task force to study the possibility of interchanging railway
company grain cars at export elevator terminals, according to Transport
Minister Otto Lang.
The task force will recommend ways railway companies can swap cars at
Vancouver and Thunder Bay export grain terminals. Elevators are traditionally served by only one railway company.
Representatives of CP Rail and CN, the Canadian Grains Commission, elevator companies and Vancouver elevator terminal employees attended a
Regina meeting.
Wheat shipments to prairie elevators are still running 20 per cent
behind last year's shipping season. Lang, who is also minister responsible
for the Wheat Board, said he anticipates 2,000 of the 3,000 boxcars
requiring repairs will be in service for the critical June shipping
rush. A CP Rail spokesman said his company is repairing 80 boxcars a
month. CP Rail is committed to fixing 1,000.
The current refusal of Vancouver workers to work overtime will go to a
federal labor conciliator, Lang said. Union representatives present at
 12
the meeting said workers were willing to undertake working extra shifts
if agreement with the grain companies could be reached, the minister
said.
CWB export shippings are currently running about 400,000 tons behind
schedule, Lang said. This is caused by an inability to load Great Lakes'
vessels before freeze-up with wheat for winter storage and by the 12
ships behind in loading at Vancouver.
(Globe and Mail, Jan. 27)
CROW RATE WEAKENING?
REGINA - Prairie farm organizations moved one step closer to renegotiating
statutory grain rates Jan. 25 when delegates to the Western Agricultural
Conference here agreed that it's not up to the federal Government to
compensate the railways fully for grain handling.
However, the vote to defeat a motion that Ottawa pay the railways for
Western grain movement was by no means unanimous. Delegates from the
Manitoba Farm Bureau and Alberta's Unifarm -- who joined forces to
defeat the motion — may very well end up dragging delegates of the
Saskatchewan Federation of Agriculture (who believe Ottawa should foot
the bill) to the negotiating table.
Along with defeating the bid to hold Ottawa responsible for compensating
the railways fro grain handling, the delegates passed a motion to continue
discussions to resolve the grain-handling problem.
(Winnipeg Tribune, Jan. 26)
"JC   A   A
WESTERN CTC COMING - LATER
WINNIPEG - A western branch of the Canadian Transport Commission with
power to oversee prairie railway operations will not be established
before the next federal election, says Transport Minister Otto Lang.
The minister has committed himself to establishing such a body to monitor
railway performance and operations of the rail system, and federal
officials have been told to prepare legislation to implement the idea.
However, Lang said in an interview Jan. 17 the legislation will not be
introduced before the expected summer election. Lang said creation of a
western arm of the CTC, which he referred to as the Western Grain Transport
Commission, is his next major priority for western transportation after
a basic rail network has been identified. However, since he does not
expect it created soon, it is unlikely the new body will be in place to
deal with many of the PRAC branchline abandonment proposals.
(The Western Producer, Jan. 25)
 13
WEST MAY 'MISS THE BUS* IN RAIL-TRAVEL REVIVAL
REGINA - Relying on the changing public mood, VIA Rail is now making
serious marketing efforts to attract people back to trains, including
improved schedules, intermodal bus-rail connections, better frequencies
in central Canada, refurbished equipment, and an imaginative advertising
campaign.
To operate efficiently, VIA needs substantial capital investment for new
equipment, improved infrastructure (track, signalling, crossing protection), and research and development to compensate for a generation's
technological backlog.
Yet federal Government funding has been limited to an initial contribution
to VIA's establishment and 25 per cent of the cost of LRC trains; in
contrast, immense sums continue to be poured into air facilities such as
a grandiose new air terminal at Calgary ($75-million) and an unwarrented
expansion of the airport at Hamilton in Ontario ($100-million).
If passenger rail is to survive, as it deserves to, government policy
must take VIA seriously — and only strong and vocal public support (in
the West) can ensure this.
(Regina Leader-Post, Jan. 20)
NFU CLASS ACTION IN LAWYERS' HANDS
SASKATOON - The National Farmers Union (NFU) is awaiting notification
from lawyers regarding the go-ahead to file a class action against the
railways, according to NFU executive secretary Stuart Thiesson.
In an interview Jan. 19, Thiesson said the union has informed Transport
Minister Otto Lang of its intent and the matter "is in the hands of our
solicitors. There is a great deal of research involved in this kind of
case and our solicitors have come up with the view that we might have a
chance if we can get certain information," he said.
The NFU claims producers have lost money as a result of the railways'
"inability or reluctance to transport grain."
While the process may take some months before all the required data is
obtained, Thiesson says he hopes to know by March "whether we should
proceed."
(Saskatoon Star-Phoenix, Jan. 20)
OTTAWA HAS PLAN TO PAY FOR TRAINS
MONTREAL - Area commuters were given hope Jan. 26 of continuing commuter
train service and an assurance of no cutbacks on the Montreal-Deux
Montagnes line until at least July.
 14
Justice Minister Marc Lalonde gave that assurance Jan. 26 as he offered
a $63-million grant from Ottawa to upgrade Montreal-area commuter stations,
trains and tracks over the next four years.
The one hitch in Ottawa's offer is that the Quebec government will have
to give its approval, because about half the $63-million already is in
the province's hands — but earmarked for another project.
Lalonde said that the federal Government is prepared to discuss with the
provincial and municipal governments and the railway companies "the
improvements that should be made to the infrastructure and rolling
stock" of the railways. He said both CN and CP Rail will have to pay a
fair share in the modernization of the commuter system.
(Montreal Gazette, Jan. 27)
JL JL JL
A   A   A
WHITE PASS FACING YEARS OF LOSSES
VANCOUVER - A federal report says it would probably take White Pass and
Yukon Corp. Ltd. of Vancouver at least 16 months to close its money-losing
110-mile railway.
To provide an alternative commercial route, government would be called
upon to spend about $16-million to upgrade the recently-completed highway from the West Coast into the Yukon, the Yukon Railway task force report said. To abandon the railway, White Pass would have to apply to
the Canadian Transport Commission. A decision could be obtained within
six months, including hearings to allow intervention by interested
parties.
But the railway has its tidewater terminal at Skagway, Alaska, and a
corresponding application to the U.S. Interstate Commerce Commission
could take more than 16 months if there were interventions, the report
stated.
The White Pass rail-water route just about broke even in 1977 at 750,000
tons for the railway and 415,000 tons for the Skagway-Vancouver water
segment. Four years of losses lie ahead for the railway, according to
the report — although it could be profitable as early as 1981, depending
on how much northbound-goods business it can get.
Total rail tonnage dropped to 629,000 this year and is expected to
continue the downward trend until 1983. In the fifth year, assuming
Yukon mining expansion goes ahead immediately, rail traffic is expected
to increase to 890,000 tons. Other traffic on the White Pass coastal
leg is also forecast to continue a downward trend.
A study by Swan Wooster Engineering Co. Ltd. of Vancouver has concluded
that a road could be cheaper than rail in the short term.
White Pass on Feb. 1 is to start operating its two coastal container
ships as towed barges to save about $l-million a year in manning costs.
But rates will have to go up in any case.
 15
The report suggested that Foothills Pipe Lines (Yukon) Ltd. of Calgary
might be interested in aiding the railway financially, since it is projected to play a prime role in the transport of materials for construction of the Yukon section of the Alaska Highway gas pipeline.
Arrow Transportation Systems Inc. of Vancouver, meanwhile, has obtained
a licence for the British Columbia portion of its proposed barge-truck
service between Vancouver and Whitehorse.
(Globe and Mail, Jan. 26)
XXX
AAA
CN TO SPEND $80-MILLION ON PRAIRIES
WINNIPEG - CN Rail projects totalling $80-million will be carried out
this year on its Prairie Region, a CN executive says. This amount
represents about one-quarter of CN Rail's 1979 system capital-spending
program of $325-million.
R. J. Hansen, vice-president of the CN'S Prairie Region, said that
$38-million has been appropriated for track maintenance and materials in
northwestern Ontario, Manitoba and Saskatchewan. This work will include
rail relay, tie replacement, ballasting and repairs to bridges.
(The Western Producer, Jan. 25)
a- * *
U.S. MAY CUT 10,000 MILES FROM RAIL PASSENGER ROUTES
WASHINGTON - The U.S. Transportation Department has completed proposals
to abandon more than 10,000 miles of the Amtrak passenger train system
and will announce the recommendations Feb. 1.
Among runs the report recommends dropping is Amtrak's Washington-New
York-Montreal service.
It is uncertain how Congress wil react to the report. Although congressmen
are in a money-saving mood, hundreds of congressional districts would
lose passenger service.
According to sources, the report recommends a system built around the
heavily-traveled Northeast Corridor from Washington to Boston, with a
skeleton of long-distance routes stretching to Florida and the West
Coast. A number of the remaining trains would be rerouted to increase
ridership.
Although last-minute changes were possible, the sources said that in
addition to the Northeast Corridor, the report would recommend maintaining
one of three New York-Florida trains, two New York-Chicago trains and a
Chicago-New Orleans train.
The New York-Chicago trains would be rerouted, with the Lake Shore
Limited going through Detroit across southern Canada, with a spur train
continuing to Boston.
 16
The Broadway Limited would run on its present route from New York to
Pittsburgh, then be rerouted through Cleveland to Chicago. The Broadway's
Chicago-Washington section would be rerouted from Pittsburgh to Washington
via Cumberland, Md.
In the West, there would be a Seattle-Los Angeles route and three routes
from Chicago and New Orleans to the West Coast, including the current
New Orleans-Los Angeles Sunset Limited and the Chicago-Seattle Empire
Builder.
In the middle of the country, there would be a route from Chicago through
Kansas City, Denver and Ogden, Utah, where it would split with sections
going to Los Angeles and San Francisco. In addition, all services partially supported by States would continue to run.
(Montreal Gazette, Jan. 31)
CANADIAN CARLOADINGS
For Week Ending
Jan. 14, 1979
Change from Similar
Period, 1978
Percentage
Change
Carloads
Volume (Tons)
Piggyback
69,620
4,515,409
7,212
7,033
621,220
101
11.2
16.0
1.4
Total for Year to
Jan. 14, 1979
Change from Similar
Period, 1978
Percentage
Change
Carloads
Volume (Tons)
Piggyback
117,821
7,730,938
12,205
7,623
744,861
222
6.9
10.7
1.8
U.S. CARLOADINGS
For Week Ending
Jan. 20, 1979
Change from Similar
Period, 1978
Percentage
Change
Carloads
Volume (Ton-Miles)
402,537
15 billion
49,407
1.7 billion
14.0
13.0
Total for Year to
Jan. 20, 1979
Change from Similar
Period, 1978
Percentage
Change
Carloads
Volume (Ton-Miles)
1,160,522
43.6 billion
122,355
4.8 billion
11.8
12.2
Total for Year to
Jan. 13, 1979
Change from Similar
Period, 1978
Percentage
Change
Piggyback
55,852
663
1.2
( ) Decrease
 17
AVIATION
CP AIR SEEKING FIVE-PER-CENT RISE IN FARE TO AMSTERDAM
TORONTO - CP Air will seek government approval of a five-per-cent fare
increase on its Canada-to-Amsterdam route.
The increase would be effective April 1 and apply to first- and economy-class
service.
Also, it will offer a new Charter Class Fare between Canada and Amsterdam,
effective May 1, which will increase length of stay. With 60-day advance
booking, the return fare from Toronto to Amsterdam will be $339 and $469
from Vancouver.
(Globe and Mail, Jan. 27)
XXX
A   A   A
JAPAN AIR LINES PLANS CUT IN FARES
TOKYO - Japan Air Lines has asked the Japanese Transportation Ministry
to approve its plan to reduce fares to the United States, Canada, Mexico
and South American countries by 15 per cent, and those to Europe by 10
per cent.
A JAL spokesman said the airline has received approval from the International
Air Transport Association. Japanese Transportation Ministry approval
would clear the way for the lower fares to be put into effect Feb. 1.
The airline made the decision to reduce fares because tickets purchased
in Japan are more expensive than those purchased in the United States
and other countries because of the Japanese yen's sharp appreciation
against the U.S. dollar.
(Globe and Mail, Jan. 27)
JL X X
A   A   A
PRICE WAR LOOMS IN CHARTER FARES
TORONTO - An air-charter price war seems to be shaping up on the North
Atlantic route this summer as Canadian charter operators begin to post
widely-differing prices.
The latest to announce prices is Suntours Ltd. of Toronto, which said
its round-trip charter fares between Toronto and London and other British
destinations will be the lowest on the North Atlantic this year.
The new fare structure announced by Suntours is bound to have an effect
on the prices of other carriers and their charter organizers who may
well try to match them if their flights do not fill up.
(Globe and Mail, Jan. 24)
 18
TOURISM & TRAVEL
MORE HOTELS HANG OUT 'NO VACANCY' SIGNS
WASHINGTON - In dozens of cities, 'no vacancy' signs are showing up with
increasing frequency — often causing chagrin and discomfort for visitors.
The reasons: a surge of travel generated by new cut-rate air fares, a
major influx of foreign visitors to the U.S., and a boom in the convention
and conference business. San Francisco, popular with both tourists and
conventioneers, is becoming one of the hardest cities in which to book a
hotel room.
San Diego, growing in popularity as a convention spot, hosted about
1,130 conventions in 1978, compared with 990 the year before. Dallas,
Houston and New Orleans, also prime convention cities, are likewise
suffering from increasingly frequent shortages of hotel rooms.
Growing numbers of foreign visitors are adding greatly to the hotel problem in many parts of the country.
"No city in the country has a hotel problem like New York," says Charles
Benisch, president of Don Travel Service, which handles arrangements for
many large corporations. "Chicago and Boston have been sold out during
certain weeks, but not all the time since September, like New York."
Washington is developing a squeeze in hotel space that threatens to
equal those of New York and San Francisco.
Things are not too different in many cities of the Midwest. In Kansas
City, Mo., for example, hotels were 80 to 100 per cent full when large
conventions were in full swing last year. Chicago has had greater
occupancy levels, too, with more conventions attracted by its new meeting
facilities and more families drawn by the city's exhibits. Hotels at
ski resorts in the upper Midwest have also booked overflow crowds.
Nationally, the growth in hotel space appears to be running behind the
growth in demand. As one industry executive puts it: "The money situation
is not really that favorable for building new hotels right now."
Because of increased operating costs and the shortage of accommodations,
prices for comfortable hotel rooms are rising in most cities. In New
York, the $100-a-night hotel room already has arrived, and the $150-room
isn't far behind.
(U.S. News & World Report, Jan. 29)
X X X
A   A   A
PIPELINE
U.S. INACTION SETS ALASKA LINE BACK FURTHER SIX MONTHS
OTTAWA - Completion of the Alaska segment of the $ll-billion-plus Alaska
Highway gas pipeline project is being put back at least another six
months because of continued delays in obtaining U.S. government and
regulatory decisions.
 19
Northwest Alaskan Pipeline Co. of Salt Lake City, the consortium responsible for the Alaskan portion of the project, has confirmed that the
earliest the section can be completed is in 1984.
Each year of delay adds $l-billion or more to the project's final cost,
now pegged at close to $14-billion.
Northwest is preparing a new schedule that will establish when a long
list of U.S. government decisions must be made during 1979 to achieve
even the 1984 completion dates.
A new schecule is expected to be announced within a week, following a
meeting with the Canadian partner in the project, Foothills Pipe Lines
(Yukon) Ltd. of Calgary.
(Globe and Mail, Jan. 27)
X X X
A   A   A
SHIPPING
INDUSTRY BLASTS OTTAWA'S SHIPPING POLICY
TORONTO - "Ineffectual," "short-sighted" and "contradictory" were among
the more printable terms applied by shipping industry executives to the
federal Government's "new" shipping policy, under which Canada will
continue to rely on foreign-flag vessels to carry its international
trade.
"What we had hoped for was a carefully measured program to protect
legitimate long-term Canadian interests," said Paul Martin, president of
Montreal-based Canada Steamship Lines Ltd. "What we got was short-term
bookkeeping."
The policy outline, contained in a report released by Transport Minister
Otto Lang, scuttles the idea of creating a Canadian-flag deep-water
fleet as too expensive.
"It reflects the Government's inability to view its relationship with
the marine community as little else but as a tax gatherer," Martin said.
"This policy underlines Ottawa's failure to grasp the fact that its
revenues can only grow if Canadian industry grows and that this will not
happen if initiative is stifled."
The Dominion Marine Association, representing Canadian-flag shipping
serving the Great Lakes and the East Coast, sees nothing positive in the
shipping policy, said Admiral Robert Timbrell, president. The basic
requirements for establishing a deep-sea fleet — tax breaks similar to
those offered by other maritime nations and access to financing on the
same terms as offered by Canada's Export Development Corp. to other
countries — have been denied.
(Globe and Mail, Jan. 26)
 20
TELECOMMUNICATIONS
MICROWAVE TOWER WILL BE MILTON LANDMARK
MILTON, Ont. - Plans are moving ahead for the building of a 200-foot
telecommunications tower in urban Milton. It will become a new landmark
for the community and is to be located just north of the CP Rail tracks,
west of Bronte St.
Bill Lidstone, a spokesman for CP Telecommunications, said Jan. 24 that
construction is scheduled to begin Feb. 5.
Town officials confirmed they have issued a building permit, but said
the site plan provides for screening the tower with shrubs and trees.
The tower is required as part of a microwave communications system that
will replace wires that now follow CP Rail tracks to Toronto. The
network is used to control trains and provide telex services.
(Toronto Daily Star, Jan. 25)
Jm        X   Jm
A   A   A
TELEX ADS PROVE TOO SUCCESSFUL
CALGARY - The intense television advertising campaign pushing the Telex
services of CNCP Telecommunications is proving too successful, says Jim
McDaniel, general sales manager of the company.
The burly, crew-cut senior executive has become a well-known television
personality in his own right, expounding the virtues of telex communications
in a variety of off-beat situations.
McDaniel said in an interview that delays in the installation of new
Telex equipment result from a deluge of orders. His employers credit
the success of the hard-hitting television spots for the increase in
telex subscribers and use of facilities.
According to McDaniel, there are some 41,000 Telex subscribers throughout
Canada. In 1978, his television appearances have recruited a record
2,800 new customers, out-stripping the available supply of equipment.
The waiting list for Telex installations is growing. It may take up to
three months to receive a standard Telex machine while delivery of more
advanced, computer-controlled equipment requires several more months.
The company normally obtains its supply of equipment from Canadian
sources. But lately it has been importing additional machines from the
United States.
(Calgary Albertan, Jan. 22)
 21
HIGHWAY
GOVERNMENT MAY ABANDON TRUCKING INDUSTRY REGULATIONS
REGINA - Gordon MacMurchy, minister in charge of the Highway Traffic
Board (HTB), Jan. 19 broached the possibility that the provincial
government should abandon its involvement in regulation of the trucking
industry.
MacMurchy, in a keynote address to the annual meeting of the Saskatchewan Trucking Association (STA), said the question is one of allowing
the industry to regulate itself. "Or perhaps no controls at all are
necessary and every company would operate as it sees fit," he said.
MacMurchy referred specifically to a recently-commissioned study of the
province's system of granting franchises and operating authorities. The
study, recommended in an earlier report by the Saskatchewan transport
advisory council chaired by Regina's Dr. John Archer, is being carried
out by consultants during the next year.
During that year, MacMurchy said he wants the STA to "think seriously"
about reduced government involvement in franchise and operating authority
regulation, currently carried out by the Traffic Board. "We (the government)
are interested and prepared to co-operate to develop the system that is
best for everyone concerned," MacMurchy said. "If complete freedom from
regulation is the answer from the point-of-view of the industry, then
that needs to be considered."
The question posed by MacMurchy follows by almost a year the conflict
between CN Express and Canadian Pacific trucking operations on one hand
and the provincial government on the other. Those subsidiaries of the
two major railways elected to pull in province shipping, leading to
conflict with the Highway Traffic Board. The conflict put local and
provincial truckers in a bind as they attempted to pick up the slack
left by the departure of CN and Canadian Pacific.
(Saskatoon Star-Phoenix, Jan. 20)
JL JL J.
A   A   A
TRUCKERS TO PUSH FOR CUT IN DIESEL FUEL TAX
REGINA - Reductions in the diesel fuel tax, a comprehensive review of
insurance rates and removal of a livestock shipping bottleneck are among
the items the Saskatchewan Truckers' Association (STA) will work on in
1979. Tom Durbin, STA's executive director, said those three items were
among the resolutions approved in closed session during the Association's
annual meeting here recently.
(Saskatoon Star-Phoenix, Jan. 22)
TRUCKING WAR
NEW YORK - Deregulation of the trucking industry is likely to ignite one
of the hottest fights in Washington over the next year or two.
 22
Teddy Kennedy recently outlined a bill to repeal the anti-trust exemption
that for the past 30 years has enabled groups of truckers to get together
and set freight rates.
(Time, Feb. 5)
AAA
BUSINESS & FINANCE
SINCLAIR SLAMS BANK ACT MOVE ON BANKER-DIRECTORS
OTTAWA - The chairman of Canadian Pacific Ltd., Ian Sinclair, says he is
opposed to proposed legislation that would prohibit officers and employees
of Canadian banks from sitting on the board of directors of his company.
Mr. Sinclair says in a brief to the Commons finance committee the prohibition in the proposed Bank Act "will work a serious disservice to
both the Canadian banking community on the one hand and to Canadian
business enterprise on the other."
The proposed bill, now being reviewed by the committee, would prohibit
officers or employees of a bank from serving as directors of any other
Canadian corporation.
Mr. Sinclair says in his brief to the committee that "bank officers who
serve as directors of other corporations have been scrupulously careful
to avoid any conflict between their duty to the bank and their duty to
the corporation of which they are directors." If a conflict develops,
they withdraw from discussion of an issue. Mr. Sinclair says Canadian
Pacific has had a "close, mutually-beneficial association with the banking community" throughout its 97-year history. Senior officers of The
Bank of Montreal and The Royal Bank of Canada had served on the Canadian
Pacific board during that time and "their contribution has been enormous."
"So far as I am aware, the record of that experience over 97 years does
not disclose any problem relating to, or arising from, a conflict of
interest," he says. "Canadian business enterprise needs the expertise,
experience and judgmental qualities of mind that senior bank officers
can provide."
(Montreal Gazette, Jan. 26)
WESTERN UNION LOSES MONOPOLY FOR TELEGRAMS
WASHINGTON - Western Union Telegraph Co. of New York has lost its domestic
telegram monopoly, ending its total dominance over a public communication
system it has operated since 1943.
The Federal Communication Commission ruled competition would be in the
public interest.
The public telegram business has been a shrinking activity for Western
Union, which controls satellites and has an array of other communications
services.
 23
At the same time it defranchized Western Union's monopoly, the FCC
approved the entry of Graphnet Systems into the domestic telegram business.
Graphnet is a subsidiary of Graphic Scanning of Englewood, N.J.
The agency said it would welcome other entrants into the business and
indicated that it intended to initiate proceedings that would eventually
make it even easier for competitors to enter the business.
(Globe and Mail, Jan. 26)
SMALL LOGGERS QUESTION NEW B.C. FOREST ACT
VANCOUVER - British Columbia's new Forest Act is less than three weeks
old but smaller members of the province's largest industry have expressed
concern about provisions yet to come in ancillary regulations to the
act.
Premier William Bennett, addressing a convention of the Truck Loggers
Association, representing the smaller logging and sawmill companies,
said the government wants to keep timber available to the smaller forest
industry entrepreneur. But two such operators wondered if this would be
so.
In British Columbia the government owns all the timber lands but the 10
or 11 large integrated companies, such as MacMillan Bloedel Ltd. and
British Columbia Forest Products Ltd., have virtually all the cutting
rights.
The independent sawmill operator, like Patrick Martin of Raven Logging
Ltd. of Campbell River, depends for the raw material he needs on what
the big companies make available through the log market. He complained
that not all the big companies take off all their allowable cut and put
the excess on the market.
If existing independent mills are starved, can the new regulations
somehow make provision for the entry of new entrepreneurs into the
industry? Michael Apsey, B.C. deputy minister of forests, said this is
one of the subjects of four Forest Act regulations still to come. A
white paper on small business and logging contracts will be released
shortly, Mr. Apsey said.
(Globe and Mail, Jan. 20)
HOW BAD IS BIGNESS?
NEW YORK - Trustbusters are preparing new legislation that would flatly
ban most mergers that result in corporations with more than $2-billion
in sales or assets.
"This frankly goes beyond narrow arguments about precise competitive
effects in individual markets and reaches the social and political
issues in our society," declares John Shenefield, head of the Justice
 24
Department's anti-trust division. "This country has always stood for
diversity, a dispersion of power balance and restraint among competing
power groups."
But because it would mark such a departure from traditional anti-trust
philosophy, any 'bigness' bill is certain to meet intense opposition
from large corporations as well as their conservative allies in Congress.
The trustbusters insist there is a problem: an explosion of merger
activity involving many of the nation's top corporations. Last year,
there were 80 announcements of mergers costing the acquiring company at
least $100-million, up from 41 in 1977. Rarely did these link firms
competing head-on in any one industry. Instead, most were 'conglomerate
mergers' of firms in different fields.
(Newsweek, Jan. 22)
STEEL RESEARCH PROJECT
TORONTO - Canada and the European Economic Community have agreed on a
three-year research project in steel production.
The aim is to improve use of a wider range of cokes in blast furnaces in
order to save energy costs. A total of 26 blast furnaces in Europe and
Canada will participate in the project.
The three Canadian furnaces involved are at the Hamilton works of Dominion Foundries and Steel Ltd., and at the Sault Ste. Marie plant of
Algoma Steel Corp. Ltd.
(Globe and Mail, Jan. 24)
X X X
AAA
CP CONSULTING OFFERS AID TO DEVELOP CHINESE PORTS
TORONTO - Canadian Pacific Consulting Services has offered its services
to the Chinese Government for the development of container ports and
container-handling systems in that country, Canadian Pacific spokesman
James Forbes confirmed.
Forbes said the proposals are very general and do not name specific
ports. "No dollar figure has been mentioned."
An official Chinese delegation recently toured the new Racine common-user
terminal in Montreal, which is operated by another Canadian Pacific
subsidiary.
(Globe and Mail, Jan. 25)
 News Summary
News and views on topics of
current interest prepared by Public Relations
and Advertising Department
 Vol.   35    No.   6    Feb.   9.   1979
16
5
15
Aviation
12
Labor
Business & Finance
20
Railway
Highway
19
Shipping
CP RAIL IMPROVEMENTS ,
The largest single expenditure of more than $56-million expended
by CP Rail in its Pacific Region during 1978 was $14.5-million for
mainline capacity improvements designed to reduce steep westbound
railway grades between Calgary and Vancouver.
Page 5
PRAC STUDIES
Officials of all the groups concerned with the final report by
the Prairie Rail Action Committee dealing with branchline abandonment state they are studying the specific recommendations and
will take more detailed positions later on.
Page 7
CPI REPORTS PRELIMINARY EARNINGS
Canadian Pacific Investments reports record earnings for 1978. Preliminary net income was $274-million, compared with $213.2-million
in 1977.  The only significant decline was in hotels.  Prospects
for 1978 are that earnings will approximate those of 1978.
Page 24
TRENDS AND TOPICS
Labor observers are concerned that mounting unrest among workers,
especially those in the public sector, will result in a record
high in man-days lost through strikes in 1979.
Page 18
Some provincial governments are considering partly deregulating
trucking and will be closely watching what happens in the U.S.,
where the Government is moving to deregulate the industry.
Page 20
CN negotiates an agreement with the United Transportation Union,
reducing the size of its freight train crews in eastern Canada. It complements one signed last September in western Canada.
Page 16
Canadian Pacific
 NEWS IN BRIEF
CIVIL SERVANTS ASK FOR 20-PER-CENT INCREASE
MONTREAL - Quebec's 200,000 public-sector workers will seek pay increases
averaging 20 per cent when talks for a new contract get underway with
the government shortly.  What the unions are seeking is well above the
average of about 10 per cent proposed recently by Finance Minister
Jacques Parizeau.
(Montreal Sunday Express, Feb. 4)
a. jl jl
21-PER-CENT RISE SOUGHT IN MINIMUM WAGE
WINNIPEG - The Manitoba Federation of Labor called on the provincial
government Jan. 31 to increase the minimum wage, at least by 20.8 per
cent, the current cost-of-living factor.
(Winnipeg Tribune, Feb. 1)
FIRMS RAISED PRICES, JUMPED PROFITS 21 PER CENT, AGENCY SAYS
OTTAWA - Canadian companies jacked up prices last year and increased
profits 21 per cent over a year-earlier, the Government's inflation
monitoring agency said Feb. 6.  The Centre for Study of Inflation and
Productivity said the 21-per-cent increase for the first nine months of
1978 was made although sales had increased only 11 per cent.
(Globe and Mail, Feb. 7)
LAKER SETS NEW FARE FOR TORONTO-LONDON
TORONTO - Laker Airways of Britain has set a new low charter fare from
Toronto to London of $300 return during the peak travel season if
booked 90 days in advance, as the price-war on the North Atlantic
routes continues to rage.  The new fare will undercut by $79 the
previous lowest charter fare Toronto-London offered by Suntours Ltd.
(Globe and Mail, Feb. 7)
HOTEL INCLUDED IN DEVELOPMENT PLAN
SASKATOON - A $10-million hotel is to be constructed here this year as
part of a commercial and industrial park near the airport.  Hotel
developer Maynard Vollan of Edmonton said construction on the 250-room
hotel should begin this spring.  It will cover about 10 acres and
contain banquet facilities for 1,000 persons, a swimming pool, lounge
and dining area.
(Saskatoon Star-Phoenix, Jan. 26)
4. 4. 4.
 COLLEGE COURSES OFFERED ON CP RAIL COMMUTER TRAIN
MONTREAL - The Centre for Adult Education of John Abbott College, with
the co-operation of CP Rail, will again offer courses aboard CP Rail
commuter trains from Beaconsfield to Windsor Station, starting Feb. 12.
The 12-week courses, conversational and business French, and personal
finance, will be taught on an especially-modified railway passenger car
incorporated into a regularly-scheduled commuter train from the West
Island.
(CP Rail News Release, Feb. 5)
TO DISCUSS CP'S ROLE IN TRADE CENTRE
VANCOUVER - Mayor Jack Volrich has arranged to discuss Canadian Pacific's
role in the development of Vancouver's waterfront Trade and Convention
Centre with its chairman and chief executive officer, Ian Sinclair,
within the next eight days.
(Vancouver Express, Feb. 5)
TELLER TO SELLER
banking industry into the travel business.  Starting next week, the
Trust company will add Air Otanabee (formerly Otanabee Airways) airplane
tickets to its list of sales services.  A new ticket system being
introduced by the airline will make sure they're as easy to sell as
lottery tickets.
(Ottawa Journal, Feb. 2)
JL       Jm       Jm
RAIL RELOCATION TOO COSTLY, SAYS CITY DELEGATION
WINNIPEG - Top city politicians are more convinced than ever that
relocation of CP Rail's yards, however desirable, is not a feasible
goal. Mayor Robert Steen, Deputy Mayor Bill Norrie and several committee
members said Feb. 5 they believe the controversial Sherbrook-McGregor
overpass is still the cheapest and fastest solution to the huge traffic
bottleneck caused at the yards.  Works and Operations chairman Gary
Filmon sought a review of railyard relocation two weeks ago.  But after
an informal meeting between city officials and CP Rail executives held
Feb. 2, Filmon said he believes relocation is possible only at substantial
cost in time and money.
(Winnipeg Tribune, Feb. 6)
4. J. J*
A   A   A
FREIGHT HIKE STILL OPPOSED
WINNIPEG - United Grain Growers announced Feb. 5 that 45 per cent of
 its farmer-members who responded to a survey oppose higher freight
rates on grain, even if an increase guaranteed better rail service.
(Winnipeg Tribune, Feb. 6)
CP HOTEL DROPOUT A BLOW TO RIDEAU CENTRE
OTTAWA - CP Hotels has dropped its plans for a major hotel in the
Rideau Centre development.  Colleen Edwards, executive assistant to the
president of the chain, said Feb. 6 "we're not thinking in terms of
Rideau Centre or anything at all in Ottawa at this time."
(Ottawa Citizen, Feb. 7)
HOPPER CARS OPPOSED
REGINA - The Palliser Wheat Growers' Association wants an injunction to
stop the Canadian Wheat Board from buying 2,000 new grain hopper cars.
The Association claims the Board's enabling legislation does not give
it the authority to purchase equipment with grain producers' funds.
(Winnipeg Tribune, Feb. 7)
SEAMEN ATTACK CP 'FOREIGN SHIPPING'
VANCOUVER - Seamen here will spearhead a Canadian Labor Congress campaign
against Canada's dependence on flag-of-convenience ships.  Canadian
Pacific is the worst offender, according to Tom McGrath, business agent
of the Vancouver Seamen's local of the Canadian Brotherhood of Railway,
Transport and General Workers. He says not one of its fleet of 30
deepsea ships flies Canada's flag, pays taxes in Canada, or employs a
Canadian crew.
(Vancouver Express, Feb. 7)
•k ie -k
CP EXPRESS STALLS UPS JUDGMENT
TORONTO - United Parcel Services is crying 'foul' after a hearing of
the Ontario Highway Transport Board into an application for PCV licences
by UPS was adjourned Feb. 6.  Canadian Pacific on Feb. 6 said the Board
doesn't have jurisdiction to proceed, and the Board is referring the
jurisdictional question to divisional court.  "It is nothing but a
tawdry delaying tactic — they know perfectly well the Board has the
power to order a rehearing," said UPS president Glenn Smith.
(Toronto Sun, Feb. 7)
 RAILWAY
CP RAIL SPENDS $42-MILLI0N IN 1978 ON B.C. PROJECTS
VANCOUVER - CP Rail spent more than $56-million for new construction,
repair and replacement projects on its Pacific Region during 1978. Of
the total, approximately $42-million was spent within British Columbia.
The largest single expenditure — $l4.5-million — was devoted towards
four mainline capacity improvement projects designed to reduce steep
westbound railway grades between Calgary and Vancouver.
Between Revelstoke and Clanwilliam (4.5 miles) and between Tappen and
Notch Hill (11 miles) near Salmon Arm, a total of $12.5-million was
spent on land acquisition, excavation, grading, drainage and bridge
construction. Both projects are expected to be completed late this year
at a final combined cost of more than $25-million.
The railway also spent $650,000 on preliminary studies for the construction
of an eight-mile tunnel under the existing five-mile Connaught Tunnel.
This particular project, likely to cost in excess of $100-million,
involves elimination of the steepest grade (2.2 per cent) on the CP Rail
transcontinental mainline.
Slightly more than $l-million was spent on a fourth section involving
some 5.5 miles of new track between Lake Louise, Alta., and Stephen,
B.C. This project, expected to cost about $l4-million when completed,
was approved by the Canadian Transport Commission last August.
In the Vancouver area, almost $1.5-million was spent on major improvements
to the railway's Coquitlam Yard. Work included:
— EXTENSIONS and addition of trackage.
PAVING of roadways and track crossings.
DRAINAGE improvements.
— INSTALLATION of floodlighting.
BUILDING extension and heating and ventilation improvements to the
car-repair shop.
Largest single expenditure in the area involved some $2.7-million for
the purchase of land for CP Rail's Intermodal Services facility at the
new Mayfair Industrial Park in Coquitlam.
On Vancouver Island, CP Rail spent close to $500,000 for various repairs
to bridges and retaining walls.
Other work projects on the Vancouver Division included the installation
of 25,000 new ties at a cost of $295,000, and $700,000 worth of repairs
and improvements to CP Rail docks and wharves at the foot of Burrard
Street.
 On the railway's Canyon Division -- between Coquitlam and Kamloops, and
Spences' Bridge and Penticton -- almost $8.5-million was spent in 1978.
Among the major projects in this area was a $4-million expenditure for
the laying of 21.4 miles of new continuous welded rail and another four
miles of new rail on curves, all of which was installed between Coquitlam
and Mission.
Another $2-million was spent for the installation of 102,000 ties at
various locations across the division. A continuing program for rock-
and soil-slope stabilization along the Fraser Canyon and Thompson River
saw more than $1.4-million spent last year. And finally, almost $1-
million was spent on replacement and repair of railway bridges at Ruskin
and Mission.
On CP Rail's Revelstoke Division (Kamloops to Field), $8.2-million was
spent on various replacement programs. Major expenditures included:
$2-MILLI0N for installation of new or replacement rail, particularly
for sidings and curves.
—  APPROXIMATELY $950,000 for installation of 65,000 new ties between
Kamloops and Revelstoke.
$365,000 for 25.5 miles of new ballast, mostly between Revelstoke
and Field.
The division also spent $3.3-million for replacement and improvement of
four bridges, most noteworthy of which was completion of the railway's
new Mountain Creek Bridge which handled its first train last August.
Approximately $4-million was spent on the railway's Kootenay Division
which covers all southern B.C. trackage from the Crowsnest in the east
to Midway in the west, and from Fort Steele north to Golden.
Largest single expenditure here went towards installation of 24.2 miles
of new continuous welded rail, mostly on the Fort Steele-Golden line, at
a cost of $3.7-million. In addition, more than $830,000 was spent for
replacement of 62,000 ties at various locations.
Throughout Alberta, approximately $l4.3-million was spent for similar
projects.
In addition to the new construction and improvement programs carried out
during the year, the Pacific Region spent some $32.3-million on regular
day-to-day maintenance.
CP Rail's Pacific Region includes more than 5,000 miles of track between
Swift Current, Sask., and Port Alberni on Vancouver Island.
(CP Rail News Release, Jan. 15)
 REPORT GETS MIXED REVIEWS
WINNIPEG - The final report of the Prairie Rail Action Committee was
required reading last week in grain company and railway head offices and
reactions to the recommended 1416 miles of abandonment ranged from
praise and compliance to opposition and outrage.
Spokesmen for groups as divergent as United Grain Growers Ltd.,
Saskatchewan Association of Rural Municipalities, and CP Rail said the
committee should be praised for ending uncertainty about the fate of
branchlines.
In Regina, the mood at the Saskatchewan Wheat Pool was bitter. Pool
President E.K. Turner accused the PRAC and chairman Fred Anderson of
arrogance, inconsistencies and wrong conclusions.
The Pool, the National Farmers Union and New Democratic Party spokesmen
were the main opponents of the report's recommendations.
They challenged PRAC conclusions, suggesting the committee had improperly
used the need for elevator competition as one of its criteria in deciding
whether to retain a line. They said the committee had underestimated
the social and economic costs of abandonment.
Boyd Anderson of Fir Mountain, president of the Saskatchewan Association
of Rural Municipalities, said he feels the PRAC approach was "reasonable"
and many of its abandonment proposals will not be controversial. He
said those opposed will still have a chance to make their case to the
CTC but he thinks the committee has been a positive force. "We have to
get a permanent network," he said. "If some people get hurt, they have
to be compensated, but it has to be done."
Palliser Wheat Growers Association spokesman Doug Campbell offered the
same view. He said many will view the committee's recommendations as
severe "but people have to realize the problem was severe. In the long
term, the report will be viewed in a positive light."
At CP Rail in Winnipeg, spokesman George Smellie said the PRAC will end
some uncertainty for the railway, and it supports the thrust of the
report. "It helps move the Prairies a little closer to the day when we
know what we are working with in the transportation system," he said in
an interview.
However, he said CP Rail could lose some money from the abandonments,
since the lines to be abandoned are subsidized and the railway is compensated
by Ottawa for any losses on grain hauls from them. If abandoned, the
grain would be delivered to a permanent network line not subject to
subsidies and the railways would not be compensated for losses on grain
hauls.
"The bottom line is still the lack of revenue," he said. "If there are
savings from abandonments, they will accrue to others and not the railways."
 Officials of all the groups concerned said they will be studying the
specific line-by-line recommendations in depth and more detailed positions
may be taken later. Most say they will be willing to help local producers
argue their case for retention before the CTC if help is needed.
(The Western Producer, Jan. 25)
J.    JL 4.
A   A   A
CN AIMS TO SLASH COSTS IN '79
MONTREAL - Although CN more than quadrupled its profit last year, earning
$136-million, CN president Robert Bandeen expects this year to be a good
deal better.
He expects to see the railway drop unprofitable services that now cost
it about $115-million a year while its revenues grow at about double the
3 per cent predicted for the economy as a whole.
The company anticipates it will earn another $115-million a year once
the federal Government relieves it of four current money-losers. He
said:
PASSENGER service, which cost CN $56-million last year, will cause
further losses this year, but by April 1 this source of red ink
should begin to dry up as VIA Rail Canada takes over the last CN
passenger services.
MONTREAL commuter service continues to lose money despite recent
fare hikes, but Quebec and Ottawa are making plans to lend a hand
in financing the service.
HE expects relief from its money-losing operation in Newfoundland
this year.
HE is also hopeful, although less so, that the federal Government
will do something by the end of the year to stem railway losses
caused by low federally-regulated grain-hauling rates.
Beyond that, CN is forecasting revenue gains, mainly from its big freight-
hauling CN Rail division, that will be nearly as healthy as the 9 per
cent posted last year. Revenue rose to $2.9-billion last year from
$2.65-billion the year before. In 1979, the forecast is for growth
between 6 and 8 per cent.
The major factor in last year's $58-million revenue gain at CN Rail was
the booming market in the U.S. and eastern Canada for sulphur, potash
and lumber from Alberta, Saskatchewan and British Columbia, said CN
official David Todd. Lumber shipments from Quebec also helped boost
growth.
CN Telecommunications posted a $5-million increase in profit to $30-million
because it has been successfil in penetrating the buoyant market for
business telecommunications services, he said. The postal strike also
helped.
 CN Hotels showed its first profit in three years — $1.7-million, up
from a loss of $2.3-million in 1977.
(Montreal Gazette, Feb. 2)
PROVINCIAL TRANSPORT PROPOSAL WINS SUPPORT
SASKATOON - The provincial government's transport proposal will get new
consideration in light of renewed controversy on the Crow's Nest Pass
rail-freight rate.
Federal Transport Minister Otto Lang said Jan. 26 he will look at
Saskatchewan's plan after Alberta and Manitoba delegates supported
changes in the statutory rate Jan. 25 at a Prairie summit of farm leaders.
Saskatchewan has vehemently opposed any change in the Crow rate and its
plan proposes extending low rates to byproducts of rapeseed, alfalfa and
other commodities — with provincial cash paid to make up the difference
between transport costs and the rate.
(Saskatoon Star-Phoenix, Jan. 29)
MOST FIRMS BACK CP RAIL RELOCATION
WINNIPEG - Some of the industries that have been identified as the prime
beneficiaries of CP Rail's downtown marshalling yards said Jan. 31 they
would support rail-yard relocation.
In a survey of firms fronting on the yards, the majority of company
spokesmen said it wouldn't make any difference to business if the yards
were moved. Rail relocation would, in fact, improve traffic patterns
and allow for expansion of present industrial facilities, said some
businessmen.
"The yards are just not in the right place any more. They may once have
been, but not at this time," a spokesman for Winnipeg and Manitoba Cold
Storage Co. Ltd. said.
(Winnipeg Free Press, Feb. l)
TORIES TO LEAD RAIL CUT BATTLE
OTTAWA - The Conservatives want to lead the fight against abandoning
Prairie branch rail lines, Don Mazankowski, the party's transport critic,
said Jan. 31.
Conservatives are not set against recommendations by the Prairie Rail
Action Committee (PRAC) that 2,265 kilometres of branchlines be abandoned,
Mazankowski said in an interview. But the committee "didn't obtain all
the views and data from groups which will be affected by its abandonment
recommendations."
 10
Mazankowski says the Conservatives have singled out at least a dozen
lines "we figure will have to be looked at in much more detail" before
they could be abandoned. "We're not suggesting that all the PRAC's
decisions are wrong; but in some cases its recommendations are not based
on accurate and full information."
The Conservatives do not intend to try to save all the lines, only those
the railways, elevator companies and communities consider needed for
proper service. "Where there is significant opposition in communities
involved, we'll be in there leading the fight."
(Winnipeg Free Press, Feb. 1)
•>V ■k   A"
LOW FREIGHT RATES URGED
MONTREAL - The Canadian Chamber of Commerce wants proposed federal
transportation legislation to include a commitment to maintain low
rates. In a letter sent to Transport Minister Otto Lang, chamber chairman
David I.W. Braide said proposed amendments to the National Transportation
Act favor "national and regional social and economic objectives" at the
expense of cost-efficiency.
Canada's small population and long distances raise transportation overhead
of the country's industries, Braide said. Both development objectives
and low-cost transportation could be met if a present declaration guaranteeing
"economic, efficient and adequate transport" is preserved in the Act.
(Montreal Gazette, Feb. 6)
J. JL    JL
A   A   A
PRESIDENT'S 1980 BUDGET REFLECTS DEREGULATION
WASHINGTON - Expecting deregulation of the railroad industry to decrease
the need for federal financial assistance, the Carter Administration's
budget for fiscal year 1980 has alloted $1.7-billion for rail programs,
a decline from $2.4-billion in 1979.
In its budget message, the Administration said it will propose legislation
early in 1979 to deregulate the nation's railroad and intercity bus
industries. "The railroads been struggling for a long time to attain
financial health, but have been hindered by an out-dated regulatory
system that prevents the economic allocation of resources within the
industry," the budget states.
The Administration said the purpose of federal aid should not be the
preservation of uneconomic railroad services that may be better performed
by other modes, but "should be to assist the railroads as they make the
transition to a deregulated competitive environment."
(Information Letter, Association of American Railroads, Jan. 31)
 11
CANADIAN CARLOADINGS
For Week Ending
Jan. 21, 1979
Change from Similar
Period, 1978
Percentage
Change
Carloads
Volume (Tons)
Piggyback
66,917
4,281,025
6,691
(2,215)
(231,279)
90
(3.2)
(5.1)
1.4
Total for Year to
Jan. 21, 1979
Change from Similar
Period, 1978
Percentage
Change
Carloads
Volume (Tons)
Piggyback
184,733
12,011,366
18,896
5,403
512,985
312
3.0
4.5
1.7
PIGGYBACK LOADINGS
For Month Ending
December, 1978
Change from Similar
Period, 1977
Percentage
Change
Container - Carloads
Trailers - Carloads
10,806
18,818
(934)
(191)
(8.0)
(1.0)
Containers - Tons
Trailers  - Tons
462,516
459,534
(22,914)
7,238
(4.7)
1.6
Total for Year to
December, 1978
Change from Similar
Period, 1977
Percentage
Change
Containers - Carloads
Trailers  - Carloads
138,698
242,278
(2,437)
4,743
(1.7)
2.0
Containers - Tons
Trailers  - Tons
5,745,309
5,915,625
204,233
249,233
3.7
4.4
U.S. CARLOADINGS
For Week Ending
Jan. 27, 1979
Change from Similar
Period, 1978
Percentage
Change
Carloads
Volume (Ton-Miles)
403,724
15.1 billion
60,431
2 billion
17.6
15.5
Total for Year to
Jan. 27, 1979
Change from Similar
Period, 1978
Percentage
Change
Carloads
Volume (Ton-Miles)
1,563,975
58.7 billion
182,515
6.8 billion
13.2
13.1
Total for Year to
Jan. 27, 1979
Change from Similar
Period, 1978
Percentage
Change
Piggyback
( ) Decrease
50,288
(3,495)
(6.5)
* * -k
 12
AVIATION
PILOTS AND CONTROLLERS RAP BILINGUALISM-IN-AIR REPORT
MONTREAL - Two unions representing 1,500 Canadian airline pilots and
2,200 air traffic controllers have taken issue with a federal transport
department study recommending bilingual air traffic control in Quebec.
A federal transport department study released last month after 18 months
of testing, concluded that bilingual air traffic control in Quebec would
have "no detrimental impact on safety." Such a statement is "completely
incorrect," the Canadian Air Traffic Control Association (CATCA) said in
a brief presented Feb. 5 to a federal commission studying the issue of
bilingual air traffic control.
In its brief, the Canadian Air Line Pilots Association (CALPA) accused
the authors of the study of paying more attention to political and
linguistical considerations than to safety.
(Montreal Gazette, Feb. 6)
*   A"  £
CHARTER AIR FARES TUMBLE IN N. ATLANTIC PRICE-WAR
MONTREAL - Air-charter fares are tumbling in what appears to be a
no-holds-barred but extremely confusing price-war on the North Atlantic
among Canadian and foreign carriers.
The latest to reduce Advance Booking Charter fares between Canada and
Britain is CP Air. The company said it has refiled its tariffs and that
its new ABC charter fare will match those announced last week by Suntours
Ltd. of Toronto.
Since the Suntour announcement, Wardair has reduced its charter prices
an average of $20 to a range of $319 to $419 (with a $5 surcharge both
ways for weekend travel), while Air Canada and British Airways have
reduced their Charter-Class Fares by $40 (in the peak season only) to
$410.
A CP Air spokesman said their new fares will match Suntours' tariffs to
most destinations.
CP Air is offering between 10,000 to 12,000 eastbound seats and will be
offering about 35,000 from Britain on its charter program this summer.
Wardair is offering the largest number of charter seats. Neither Air
Canada nor British Airways have disclosed the number of Charter-Class
Fare seats they will be offering.
Both CP Air and KLM of The Netherlands have also announced a new holiday
fare structure for Charter-Class Fares between Canada and Amsterdam. By
booking 60 days in advance, instead of 30 days, travellers will save $20
on the round-trip fare. The two airlines are also reducing their youth
fare by 17-percent and expanding the qualifying age category to include
those between 12 and 25 years, instead of limiting it to those 21 and
under.
 13
CP Air and Wardair have run into conflict with the Canadian Transport
Commission because they are advertising charter programs not yet approved
by the CTC. The commission has also warned them to stop advertising
selling tickets on "open-jaw," "double-drop" and "pickup" flights because
these are not yet part of Canadian charter regulations.
(Globe and Mail, Feb. 2)
jl    X X
A   A   A
AIR CANADA TO PUT $300-MILLI0N INTO NEW AIRCRAFT IN NEXT DECADE
MONTREAL - Air Canada will embark this summer on one of the largest
re-equipment programs in its history in which it plans to spend about
$300-million a year in the next 10 years on new aircraft, according to
Claude Taylor, president and chief executive officer.
Competition for the $3-billion orders that will flow from the investment
is already intense among world aircraft manufacturers. The purchases
will be in addition to an equipment program now underway to tide the
airline over until the new planes begin to arrive in 1982.
The "big" decision by the airline on what direction it will go in aircraft
selection will be made in May or June this year, Taylor said.
The new-technology aircraft to be ordered will carry a larger number of
passengers over the short-to-medium-range routes the airline now operates
at less cost per passenger than aircraft now in the fleet.
The new-technology planes scheduled to arrive in 1982 will mean "operating
improvements of only 2-to 4-percent better, but they represent millions
of dollars less in operating costs." The company plans to phase out 27
DC-8s and 46 DC-9s, although a few of may be retained for cargo operations.
(Globe and Mail, Feb. 2)
AAA
AIR CANADA NOW FELT READY TO FLY WITHOUT GOVERNMENT PROTECTION
MONTREAL - Air Canada is ready to fly on its own and is throwing off the
security blanket of government protection, according to Claude Taylor,
president and chief executive officer.
The airline industry in Canada has now reached a level of maturity where
all carriers have a right to a place in the sun, he said in an interview.
In what would likely be regarded by rival CP Air as a startling admission,
he said: "There is place for two transcontinental airlines in Canada and
there is place for the regional carriers." But to what extent the
regulators in Ottawa will permit more competition is unknown and the
change in style may be slow in coming.
With a strong record of profits behind it in the past two years (about
$47-million in 1978 and $20-million in 1977), Air Canada is viable
enough and large enough to withstand the pressures of the marketplace on
its own. The airline is projecting a profit of $60-million this year.
 14
But in opening the door to competition, Mr. Taylor also signalled that
it is a two-way street and that his airline will be a tough competitor.
Mr. Taylor said the airline industry, particularly in North America, is
now changing rapidly as it becomes more involved in the leisure-oriented
travel market as opposed to the business market.
(Globe and Mail, Feb. 2)
A -V *
AIR CANADA RECEIVES MANDATE TO BEGIN TALKS FOR NORDAIR SALE
MONTREAL - Air Canada has not discarded the idea of keeping a minority
interest in Nordair once it sells the regional carrier back to the
private sector, Claude Taylor, Air Canada president, says.
Mr. Taylor said that the Crown-owned Air Canada now has a mandate to
open negotiations with potential Nordair buyers but that any sale of the
Nordair stock it has acquired will have to be at the prevailing market
value.
(Globe and Mail, Feb. 1)
X x X
A   A   A
NORDAIR EARNINGS UP $1.4-MILLI0N
MONTREAL - Nordair Ltd. reported final profit of $4.6-million or $2.17 a
share, compared with $3.2 million or $1.46 a share in 1977.
Revenue in 1978 increased to $85.7 million from $78.2 million. The
company also said it has ordered two Boeing 737's for delivery in Dec.
1979 and Feb. 1980.
(Montreal Gazette, Feb. 2)
X   X   Jm
AAA
AUSTRALIA CLOSER WITH LOW FARES
TORONTO - The Pacific is opening up with many new low air fares. The
latest comes from Qantas and Pan Am — a Super Apex return (book 30 days
ahead) between California and Sydney at US$515. This was effective Feb.
1 and CP Air is expected to apply for a competitive flight out of Vancouver
shortly.
Both CP Air and Pan Am have sought low-level fares into Australia for a
couple of years but it was rejected by the government down under. Pan
Am has even had a Budget fare to New Zealand for about a year (out of
California) and found many Australian-bound passengers using it.
(Financial Post, Feb. 3)
 15
DISCOUNTS MAKE AIRLINES A PROFIT EXCEPTION
NEW YORK - Despite record-setting traffic and revenues, the airline
industry has a problem: discount fares are cutting into the average
revenue per-passenger mile. As a result, fourth-quarter earnings were
generally disappointing, and three major airlines operated at a loss
during the final three months of 1978. Because the first three quarters
were spectacular for most of the carriers, however, full-year earnings
generally were up substantially over 1977.
The boom in airline travel began in the fourth quarter of 1977, and
December was the 15th consecutive month of double-digit traffic gains
for the airlines. This means that additional gains are now increasingly
difficult to achieve, because they must come on top of an already high
base. Load factors are at near-record levels, and carriers are struggling
to increase revenues at a time when capacity cannot be readily expanded
and operating costs are climbing.
The drop in earnings was not unexpected. Several airline analysts
warned that with discounts encouraging more people to fly, the airlines
would need continued high rates of traffic growth to offset cost-pressures.
With many in the industry anticipating a slowing of traffic growth in
1979, continued pressure on earnings can be expected. Traffic was up
16.2 per cent for all of 1978, but by only 11 per cent in December.
(Business Week, Feb. 12)
A  A   A
SHIPPING
VANCOUVER PORT HANDLES RECORD CARGO TONNAGE
VANCOUVER - The Port of Vancouver handled a record 45,210,000 metric
tonnes of cargo in 1978, with all major commodities contributing to a
5.7-per-cent rise in shipments.
The largest single tonnages were accounted for by coal shipments of
14,426,000 tonnes, up from 12,516,000 tonnes a year earlier. Grain
shipments rose last year by 2.8 per cent to 7,784,000 tonnes from
7,566,000 tonnes in 1977. The total was a new record for the port in
spite of difficulties encountered last year in the overall movement of
grain.
Shipments of sulphur totalled 3,967,000 tonnes in 1978 compared with
3,375,000 tonnes the previous year. Potash registered the largest
year-over-year increase, with shipments totalling 2,744,000 tonnes in
1978, compared with 1,967,000 in 1977, for a rise of nearly 40 per cent.
Lumber shipments levelled off from the totals of the previous two years,
in 1978 totalling 2,280,000 tonnes, down from 2,313,000 tonnes in 1977.
Pulp shipments through the port rose to 1,226,000 tonnes last year from
900,000 tonnes in 1977.
 16
Shipments of imports showed a mixed pattern, with tonnages of phosphate
rock up to 756,000 tonnes in 1978 from the previous year's 679,000
tonnes, while iron and steel products dropped to 139,000 tonnes from
175,000 tonnes.
General cargo imports were down over 20 per cent to 4,077,000 tonnes
from 5,128,000 tonnes, reflecting in part the lower value of the Canadian
dollar, which discourages imports, and import quotas set by Government.
The number of containers handled in the port declined marginally. In
1978, the equivalent of 113,016 twenty-foot units moved through the
port, compared with 119,516 units in 1977.
(Winnipeg Free Press, Feb. 2)
NEW TRAFFIC JAM LOOMING FOR VANCOUVER
VANCOUVER - Canada recently curtailed sales of grain to Japan in an
effort to ease congestion in the Port of Vancouver, but now there is a
new traffic pile-up looming because of unprecedented sales of oil seeds,
such as flax, rye and rapeseed.
Between 15 and 20 ships are scheduled to dock at Vancouver this month to
collect cargos of oil seeds. The traffic has been running at a level of
between 150,000 and 200,000 tons a month since last fall and now accounts
for one-third of all grain deliveries to the port from Prairie points.
Oil seeds present a special problem for Vancouver. Their sale and
handling is not controlled by the Canadian Wheat Board and there is no
pooling of supplies to permit vessels to load wherever there are oil
seeds in stock. The difficulties caused by lack of flexibility in the
handling of oil seeds have been compounded by delays in deliveries.
Late last year, the Canadian Wheat Board, which controls the allocation
of railway grain cars, restricted the supply of rolling stock for moving
oil seeds.
This restriction was later lifted, but any improvement in car supply
takes time to work through the system. Alberta Wheat Pool mounted a
temporary truck haul between Alberta and B.C. last December in an effort
to move oil seeds unable to travel by train. Since it cost Alberta a
premium of 400 per cent to substitute truck for rail cars, the move was
seen as a publicity measure, designed to force a prompt increase in the
numbers of grain cars assigned to moving oil seeds.
(Vancouver Express, Feb. 5)
A   A*  A
LABOR
CN CONCLUDES MANNING DEAL WITH UNION
MONTREAL - CN may become the envy of the North American rail industry
for an agreement it has negotiated with the United Transportation Union
(UTU), cutting the size of freight-train crews in eastern Canada.
 17
The agreement, ratified Jan. 31 by the union, complements one signed
last September with the same union for western Canada.
The railway expects to save $160-million during the 10-year life of the
two agreements. Of those savings, about $40-million will be turned over
to the union.
The two CN agreements reduce crews from three to two — not counting the
engineer who belongs to a different union — on 80 per cent of freights
in the west and 50 per cent in the east by eliminating one of two brake-
men.
In the United States, Conrail and Milwaukee Road have similar crew-reduction agreements with even better benefits. They have to pay special
bonuses in perpetuity, which makes the Canadian agreements with their
10-year limit look especially good to other U.S. railways, says Stewart
Cooke, CN's assistant vice-president for labor relations.
The CN agreements give older workers the option of taking early retirement with up to 80-per-cent pay, and it guarantees that no protected
employee will be laid off during the life of the contracts.
(Ottawa Citizen, Feb. 1)
NEW STRIKE IMMINENT, AIR INSPECTORS WARN
OTTAWA - Representatives of more than 400 Transport Canada pilots and
aviation inspectors, warning another strike was imminent, Feb. 1 criticized the Government for not "taking Canada's air safety seriously."
Ed Jensen, representing the Canadian Union of Professional and Technical
Employees, said the group has "an employer that doesn't understand our
situation" and that a strike could occur within a month.
Negotiations between the union — part of the Aircraft Operations Group ■
and the Treasury Board broke down Jan. 31 after two days of talks.
(Montreal Gazette, Feb. 2)
UNIONS STEP UP ORGANIZING DRIVE
TORONTO - After stalling briefly during the past two years of controls,
unionization drives are beginning to shift into high gear.
A Post survey of Canada's major unions reveals enormous optimism at the
prospect of renewed membership growth. On the basis of a Post survey,
it's believed growth this year likely will exceed five per cent vs 3.8
per cent in 1977-78 -- but still below the 6.4-per-cent annual growth
rates posted during 1971-76.
(Financial Post, Feb. 3)
 18
LABOR IS ANGRY
TORONTO - Mounting labor unrest in recent weeks is starting to revive
some 1978 fears — that Canadian strike losses this year will exceed 10
million man-days, the worst in three years.
The source of the fears is old: pent-up pay demands and bargaining constraints in the public sector. But as a meeting of 600 irate Toronto
bus and streetcar drivers showed 10 days ago, a sour, if not angry, mood
has started to envelop labor. And that not only is new but, according
to senior industrial relations observers, foreboding.
Toronto drivers went on strike last year only to be legislated back to
work. Two weeks ago, they learned that their cost-of-living allowance
award would not be based on a prevailing 1978 standard but a less-
productive 1979 consumer-price index that would cost them $500,000.
Normally quiet, law-abiding citizens, the TTC workers immediately started
talking of not collecting fares, possibly working to rule and perhaps
even conducting wildcat strikes. Management retorted that if fares were
not collected, the drivers would be fired.
Some labor observers are concerned about what this type of attitude
implies for private and public sector bargaining this year.
More than 500,000 workers are due to negotiate with corporate employers
in 1979. In some cases employees, armed with the knowledge that profits
have been high in their industry, will be looking for major pay increases.
But what really worries the observers is a series of confrontations they
see coming between another 700,000 public-service workers and their employers. Not only are the public workers complaining about real-income
losses during 1978, they are girding for a showdown over a host of legislation that would restrict their bargaining power. There is no way of
forecasting the outcome in either case. But there is every possibility
that the number of man-days lost through strikes this year will reach
into double-digit millions.
A lot of mood-setting will be created meanwhile by bargaining in major
private industries this spring and summer. Several of the negotiations
are expected to wind up in strikes:
CHANCES of a walkout on the railways this spring and in the auto
industry this fall are rated as better than 50 per cent.
THE prospects of a railway strike are widely accepted among industrial
relations observers across Canada. Close to 95,000 rail employees
are looking for a minimum raise of 12 per cent plus pension and
other improvements. The outcome, however, will almost certainly
be decided by Parliament after a short walkout of employees.
A strike also is conceivable in the West Coast forest industry,
which has been booming and where profits have been uncommonly high.
(Financial Times, Jan. 29)
 19
MORE LABOR TROUBLES FOR BRITAIN'S CALLAGHAN
NEW YORK - British Prime Minister James Callaghan's shaky Labor government,
already reeling from a transport strike, is bracing for a pie in the
face from another direction -- its own Government workers.
Britain's 1.1 million garbage collectors, road crews, hospital maintenance staffs, water-authority workers, and ambulance drivers have staged
a work stoppage and rallied in Westminster in pursuit of a $120-weekly
minimum wage.
In a drama eerily reminiscent of the wage-demand explosion of 1977,
which was climaxed by the coal miners' strike that brought down the
Conservative Government of Edward Heath, the Callaghan Government now
faces escalating demands from the public sector. In Britain, that
spells big trouble. One of every three employed Britons and 55 per cent
of the country's unionists are on public payrolls.
The unions now negotiating with the Government are seething, because in
Britain's 3\ years of pay restraint, public workers have borne the brunt
of the sacrifice.
(Business Week, Feb. 12)
DOCKMEN TURN DOWN THREE-YEAR PACT
VANCOUVER - B.C. longshoremen have bucked their negotiators' recommendation by voting narrowly to reject a tentative three-year collective
agreement which would have given them a total wage increase of $2.70 an
hour.
The officers have made no decision yet on taking a strike vote.
(Vancouver Express, Feb. 5)
X   Jm Jm
HIGHWAY
TRUCKERS SUBJECT TO ARRAY OF RULES
OTTAWA - In Canada's complex trucking industry, regulation is an issue
that has been debated for years but which is now taking on added importance
because of the furious debate on deregulation in the United States.
But, unlike that in the U.S. — where the Interstate Commerce Commission
centrally controls much of the trucking industry's activities — regulation
of trucking in Canada has been left by Ottawa to the provinces.
And according to David Maister of the Business Administration Department
of Harvard University who spent three years studying trucking rules
while at the University of British Columbia, it has resulted in a maze
of tangled regulations and rubber-stamp decisions. Notoriously underfunded and lacking in personnel with training in accounting, economics
or statistics, the regulatory overseers "either rubber-stamp the carrier's
 20
rate application, or say 'well, they've asked for a 10-per-cent increase,
we'll offer them five per cent and see how hard they scream,'" says
Maister.
In recent years, say government officials, attempts have been made to
upgrade provincial staffs and progress has been made in streamlining
some aspects of trucking regulations, mainly through the Canadian Conference
of Motor Transport Administrators, a body that brings together provincial
transport officials. Transport Minister Otto Lang said recently that
Ottawa has no intention of moving into this area of administration. Recently, a few provinces, notably Ontario and Quebec, have shown an
interest in partly deregulating trucking.
And the result is, in general, less regulation in Canada than in the
U.S. But the industry in Canada is subject to an immensely-varied,
confusing array of regulations that, according to those familiar with
the industry, are often poorly enforced. But the trucking industry,
with its general freight, refrigerated goods, household goods and other
sectors is tremendously complex and no one is sure what the effects of
fewer rules would be.
The traditional argument is that deregulation would lower freight rates,
but defenders of the status quo say that drop in rates would destroy the
industry's stability, leading to concentration, possibly widespread
bankruptcies among smaller truckers, and reduced service as non-regulated
truckers gave up less-profitable routes.
"The view in the industry is that it would lead to traffic consolidation,"
observes a spokesman for the Canadian Trucking Association, which represents
3,000 trucking firms across the country. "The big guys would get bigger
and the devil take the smaller guys."
Maister, in his analysis of the Canadian trucking industry, is not so
sure on either count. He says benefits in terms of lower rates from
deregulation will be small, noting, like others, that deregulation of
U.S. airlines has produced higher, not lower, cargo rates. As for
bankruptcies, he points to the examples of Britain and Australia, which
has deregulated their trucking industries without the industries becoming
too competitive.
(Financial Times, Jan. 29)
*  A"  A
BUSINESS & FINANCE
DEREGULATING TRANSPORTATION
WASHINGTON - Give most businessmen and investors a sympathetic ear and
they'll spend hours ranting about interfering bureaucrats and the cost
of Government regulation. But what happens when Government steps aside
and lets an industry conduct its affairs largely free from interference?
In the case of the United States airline industry, fares have fallen,
passengers have increased and profits — for the time being — are up.
 21
But deregulation only came about over the loud protests of a large part
of the industry, and many airline executives are still anxious about the
issue.
Nevertheless, President Jimmy Carter emphasizes that deregulation is at
the top of his priorities. "This year we must begin the effort to
reform our regulatory process for the railroad, bus and trucking industries,"
Carter told a joint session of Congress and a nationwide television
audience in his State-of-the-Union address Jan. 23. "America has the
greatest economic system in the world. Let's give it a chance to work."
But just the day before, when an outline for trucking deregulation was
announced by a group of senators, the American Trucking Association
followed with a blistering attack on the proposals and support for the
present regulatory system. Both truck owners and their employees —
represented by one of the most powerful unions in the U.S., the Teamsters —
are united in an all-out bid to stop deregulation.
Only the railroads are welcoming the demise of government interest in
their affairs -- for the admitted reason that in a business wracked by
bankruptcies, aging equipment and at best paper-thin profit margins,
there's not much to be lost anyway.
Deregulation is a key part of President Carter's plan to open up the
U.S. transportation industry to more competition, and to limit the
growth and influence of Big Government. More competition, the administration
hopes, will lead to better service and lower prices — a bonus in the
president's fight against inflation.
For Canada, the success, or lack of it, of the U.S. experiment could go
a long way to determining the future of Canadian transportation.
Provincial governments in Ontario, Quebec and Nova Scotia have already
been making noises about trucking deregulation and they will be closely
watching what happens in the U.S.
On the airline side, some western Canadians now find it cheaper to drive
to Seattle or Minneapolis to catch winter charter flights rather than
take similar flights from Vancouver or Winnipeg.
(Financial Times, Jan. 29)
SINCLAIR ISSUES STATEMENT ON 0 & Q SHARE SPECULATION
MONTREAL - The following statement was issued Feb. 6 by Ian D. Sinclair,
chairman and chief executive officer of Canadian Pacific, regarding
current speculation in the shares of the Ontario and Quebec Railway
Company:
"Canadian Pacific has no intention of paying excessive prices for shares
of the Ontario and Quebec Railway Company that are currently held or
being traded by shareholders other than Canadian Pacific.
 22
"There is nothing in the judgment of the Supreme Court of Ontario that
would justify a price for 0 & Q shares at the level these shares are
reported to have been trading. Fundamentally, the 0 & Q shares remain a
security which produces a guaranteed annual payment of $6.00. The additional
value is speculative and I would suggest that people who wish to speculate
in 0 & Q shares should first obtain legal advice as to the effect of the
judgment.
"Canadian Pacific Limited and Marathon Realty Company Limited, a wholly-
owned subsidiary of Canadian Pacific Investments Limited, have both
appealed the judgment. Both these companies believe that even if the
Court of Appeal maintains the judgment the effect on them would not be
material."
(Canadian Pacific News Release, Feb. 6)
A    J> JL
AAA
ALGOMA PERFORMANCE CREDITED TO TEAMWORK
SAULT STE. MARIE - John Macnamara, president of Algoma Steel Corp. Ltd.
has told company employees that 1978 may very well have been the best
year in the history of the steel producer.
In an interview published in the Algoma Steel Newsletter, the president
said: "We exceeded just about everything we had looked forward to in
1978 and finished up the year with a record-breaking December," and
"profit was higher than what we had planned."
Macnamara credited teamwork within all aspects of Algoma's operations as
a major reason for the record performance. He said the company had no
serious equipment problems as had occurred in previous years.
(Globe and Mail, Feb. 2)
X X X
A   A   A
MB LEADS PARADE OF RECORD FOREST PROFITS IN 1978
VANCOUVER - MacMillan Bloedel Ltd. has joined the parade of Canadian
forest companies announcing record profits for 1978.
MB announced in a preliminary report Feb. 1 that it had record earnings
of $100.9-million or $4.50 per share for 1978, up 66 per cent from
$60.7-million or $2.70 per share in 1977. An extraordinary charge
reduced 1977's final net profit figure to $38.4-million or $1.65 per
share.
Sales and other income in 1978 exceeded a record $2-billion, compared
with $1.7-billion the year before. All figures are preliminary and
unaudited.
The company said a combination of vigorous markets, an increase in the
value of the U.S. dollar against the Canadian dollar, and increased productivity all contributed to the increase in 1978 earnings.
(Vancouver Express, Feb. 1)
 —
23
COMINCO GETS BOOST FROM ZINC
VANCOUVER - Cominco Ltd. has reported net earnings of $63,035,000, or
$3.33 per share, for 1978, compared with $62,248,000 or $3.43 per share,
the year before.
The decline in per-share earnings reflected an increase in preferred-share
dividend requirements.
Cominco said zinc metal and concentrate sales were much better than in
1977. The lower value of the Canadian dollar also benefited profits.
(Vancouver Express, Feb. 1)
FOREST FIRMS GET $235-MILLION AID
OTTAWA - The Government is giving the newly-profitable forest products
industry $235-million to help upgrade production facilities in the next
five to seven years to help keep it competitive in world markets.
The Government also announced Feb. 1 that it would work out new agreements
with the provinces to improve forest management and create new stocks of
wood in badly-depleted forests.
In addition, discussions will be held with British Columbia to work out
ways of assisting plywood and lumber mills in the southwestern part of
the province.
(Montreal Gazette, Feb. 2)
J. JL. A
FRANCE EYES ARCTIC GAS
OTTAWA - Canada and France may discuss the shipment of liquefied natural
gas from the Canadian Arctic to France during meetings this week in
Ottawa between Prime Minister Trudeau and French Prime Minister Raymond
Barre.
Canadian officials said Petro-Canada, a participant in the Arctic LNG
project, is interested in exporting LNG to France.
(Montreal Gazette, Feb. 2)
DOMINION BRIDGE NET UP 21 PER CENT
MONTREAL - Dominion Bridge Co. Ltd. reports 1978 operating profit of
$37.3-million or $3.50 a share, compared to $32.2-million or $3.03 in
1977. Revenues were $886-million compared to $533-million. All figures
are in U.S. dollars.
After deducting foreign-exchange losses, 1978 income was $34.4-million,
up 21 per cent from 1977. The company said in a statement Feb. 6 that
its order backlog at Dec. 31 was $510-million, up 29 per cent from a
year earlier.
 24
Company chairman K. S. Barclay said 34 per cent of 1978 earnings came
from the December, 1977 acquisition of Amtel Inc. in the U.S.  He
"reasonably anticipates further acquisitions now that Amtel has been
fully-integrated."
(Montreal Gazette, Feb. 7)
CANADIAN PACIFIC INVESTMENTS LIMITED REPORTS PRELIMINARY EARNINGS
MONTREAL - Canadian Pacific Investments Limited Feb. 8 reported record
earnings for 1978.  Preliminary consolidated net income amounted to
$274-million, or $4.51 per common share, compared with $213.2-million,
or $3.55 per share, in 1977. Earnings for 1977 included extraordinary
income of $8.5-million from the sale of a subsidiary.
For the final quarter of 1978 net income was $102-million, up from
$55.4-million in the corresponding period of 1977.
Most of the company's activities contributed to the year's improvement.
Investment income was up sharply, reflecting a net gain of $23.8-million
on the sale of the company's interest in TransCanada PipeLines Limited.
Income from iron and steel operations was double the previous year's
level, primarily because of higher steel product shipments and better
steel prices. Higher prices accounted for improvement in oil and gas
earnings. Earnings of the forest products group were favorably affected
by the higher U.S. dollar exchange-premium as well as by increased
volumes and better prices for most products.  Income from coal mining
rose, chiefly as a result of increased volumes and lower unit costs.
Real-estate earnings benefited from gains on property sales.
The only significant decline occurred in hotel results, which included
losses on foreign operations as well as substantial write-offs.
Prospects for 1979 are that earnings will approximate those of 1978,
with increased profits from the operating companies off-setting the 1978
gain on the sale of the TransCanada PipeLines shares.
The company's annual report is to be issued in the latter part of March.
(Canadian Pacific Investments News Release, Feb. 8)
CITY TO BE PLUGGED INTO ELECTRONIC MAIL SERVICE
OTTAWA - How would you like to send a letter to Vancouver and have it
arrive in two hours?
Lightning cross-country delivery — for less than $1 a letter —is
coming to Canada's major cities this year via a new mail system that
uses neither truck, airplane nor human hands. And Ottawa will join the
first Montreal-Toronto link this spring.
(Ottawa Journal, Feb. 7)
 News Summary
News and views on topics of
current interest prepared by Public Relations
and Advertising Department
Vol.  35    No.   7    Feb.   16,   1979
Aviation 20      Pipeline 21
Business & Finance 23      Railway 5
Labor 19      Tourism & Travel        18
CANADIAN PACIFIC EARNINGS' REPORT
Canadian Pacific reports the highest earnings in its history for
1978. Preliminary net income amounted to $34l-million, compared with
$247-million in 1977. The improvement was almost equally attributable
to CP Investments and transportation.
Page 23
CN PROFITABILITY
CN Rail is emerging as one of the most profitable railroad freight
operations in North America, states an article in Railway Age. The
magazine gives the major credit to a new, profit-oriented management
team, which has adopted technology to increase productivity.
Page 5
PR 'HARD SELL'
Increasingly, corporate leaders in the U.S. are becoming convinced
that an organized and systematic program to win friends and influence
people — that is, Public Relations -- is the remedy for the varied
tribulations that currently beset their organizations.
Page 24
TRENDS AND TOPICS
The Government may want to sell a part interest in Air Canada to
the private sector within five years as the next major step in the
airline's corporate evolution, says the president of Air Canada.
Page 20
Because CP Rail's traffic volume in the Edmonton area is increasing
about 14 per cent a year, the company has moved its Alberta North
Division superintendent offices from Calgary to Edmonton.
Page 8
CP Rail opens a new $200,000 track-maintenance training centre at
its St. Luc Yard in Montreal. The new centre is one of four specialized maintenance-training facilities operated across Canada.
Page 14
Canadian Pacific
 NEWS IN BRIEF
MERGER CREATES RAIL GIANT
CLEVELAND - Shareholders of Chessie System Inc. and Seaboard Coast Line
Industries Inc. have approved a merger that will create the largest rail
network in the U.S. if approved by the Interstate Commerce Commission.
But Hays Watkins, Chessie chairman and president, said it might be 31
months before the Commission renders a decision.
(Montreal Gazette, Feb. 15)
ONTARIO WILL SUPPORT PLEA FOR STOL-SERVICE ON ISLAND
TORONTO - The Ontario Government will argue before the Canadian Transport
Commission that the Toronto Island Airport should be converted to a
Short-Takeoff-and-Landing (STOL) port, Transportation Minister James
Snow said Feb. 14.
(Globe and Mail, Feb. 15)
'COMMITTED TO FIGHT' STOL-PORT ON ISLAND, MAYOR, COUNCIL SAY
TORONTO - A head-to-head battle between the City of Toronto and the
Ontario Government over transportation policies came a step closer Feb.
14 with the province's announced support of Short-Takeoff-and-Landing
(STOL) services at the Island Airport. "We're committed to fight it as
far as we can," Toronto Mayor John Sewell said.
(Globe and Mail, Feb. 15)
ALBERTA OIL SALES TO THE MARITIMES VIA U.S. STUDIED
OTTAWA - Alberta and two Maritime Provinces are exploring the possibility
of using a reversed Portland, Me., to Montreal pipeline to carry Alberta
crude oil to New Brunswick and Nova Scotia.
(Globe and Mail, Feb. 15)
AREA STUDIED
EDMONTON - The province is to find out how good grain handling and
transport is for the Peace River region, say Transportation Minister
Hugh Horner and Agriculture Minister Marvin Moore. There's to be a
study on the area's existing and future production ability and whether
there should be new rail links, elevators and trucking arrangements to
serve it, the ministers said Feb. 8.
(Calgary Albertan, Feb. 9)
 TRUDEAU SUPPORTS RAIL YARD RELOCATION
WINNIPEG - Prime Minister Trudeau indicated support Feb. 13 for relocating
CP Rail's huge downtown Winnipeg yards. At a press conference in Brandon,
Man., Trudeau told reporters that relocating the yards rather than
building an overpass would be "a Liberal approach" that would avoid
disruption of neighborhoods. The Prime Minister entered Winnipeg's
controversial overpass/relocation debate after meeting with delegations —
including lone Manitoba Liberal MLA Lloyd Worthy -- favoring rail-yard
relocation. Trudeau committed himself to reviewing the alternative of
rail relocation with Federal Transport Minister Otto Lang and Urban
Affairs Minister Andre Ouellet. While Trudeau didn't say he would halt
final federal approval required for construction of the Sherbrook-McGregor
overpass, he did agree to discuss delaying the order with Lang.
(Winnipeg Free Press, Feb. 14)
A"  A  *
BANDEEN SAYS WHEAT BOARD HOPPER-CAR PLAN NEEDED
WINNIPEG - CN has agreed with the federal Government to share costs of
restoring a second batch of 1,000 boxcars for use in the grain fleet,
Robert Bandeen, president and chief executive officer, said in Winnipeg
Feb. 13. Bandeen said the agreement follows on a deal concluded last
fall whereby Ottawa and CN are sharing the roughly $7.3-million cost of
restoring 1,000 cars to working order through major repairs. Bandeen
said restoration wasn't a long-term solution to the need for grain cars.
He said the railway is retiring 1,000 boxcars a year so the refurbished
units would only arrest the decline for two years.
(Winnipeg Free Press, Feb. 14)
4. JL 4.
A   A   A
$10-MILLI0N SOUGHT FOR CENTRE
VANCOUVER - Mayor Jack Volrich and B.C. cabinet ministers Grace McCarthy
and Don Phillips will be in Ottawa on Feb. 13 to seek federal commitments
of $10-million toward the construction of a Trade and Convention Centre
at the city's Pier B-C.
(Vancouver Express, Feb. 9)
NEW BODY PLANNED TO PROBE ACCIDENTS
OTTAWA - Transport Minister Otto Lang introduced legislation Feb. 12 to
establish an independent commission to investigate all major air, sea
and rail accidents, including mishaps on oil-drilling rigs. Lang, who
has been accused in the House of Commons recently of not enforcing
air-safety regulations, said the crash investigation commission will be
"completely independent of Transport Canada."
(Montreal Gazette, Feb. 13)
 CONSUMERS SLAM AIR FARE INCREASE
OTTAWA - The Consumers' Association of Canada has asked the Canadian
Transport Commission for a public hearing into proposed air-fare increases that could go into effect in April. Air Canada, CP Air, Nordair
and Transair were among major airlines which sought a five-per-cent
increase in their fares starting Jan. 1.
(Montreal Star, Feb. 14)
CP RAIL GRAIN MOVEMENT
TORONTO - CP Rail reports that it carried 55 per cent of grain moved in
the first five months of the 1978-79 crop year. The railway said it
carried 6.3 million tons of grain in the period, compared with 5.1
million tons carried by CN.
(Globe and Mail, Feb. 13)
* * *
ALGOMA STEEL REPORTS PROFIT DOUBLED
TORONTO - Algoma Steel Corp. Ltd., No. 3 Canadian steel-maker, reports
operating net earnings nearly doubled to $69,616,000, or $5.15 a share,
from $37,530,000, or $2.62 a year earlier.
(Toronto Daily Star, Feb. 9)
INQUIRY WILL PROBE THE PORT OF QUEBEC
OTTAWA - The Government has appointed a commission to find out
why the Port of Quebec is losing business. The Port of Quebec has been
losing business to Montreal and longshoremen are being laid off.
(Montreal Gazette, Feb. 13)
REPORT COULD EASE PRESSURE FOR NEW GRAIN-CAR ORDERS
WINNIPEG - A report on collecting and shipping grain to export terminals
in western Canada will recommend significant changes to avoid extra car
switching and mis-shipments, according to informed sources. It will
show the turnaround time of rolling stock can be improved for up to 20
per cent more use, indicating that up to one-fifth fewer hopper cars
might be needed than the Canadian Wheat Board proiection of 20,000
by 1985.
(Winnipeg Free Press, Feb. 12)
 RAILWAY
CN PRODUCTIVITY IS THE ROAD TO PROFITS — AND CN RAIL IS SHOWING THE WAY
BRISTOL, Conn. - CN Rail this year is emerging as one of the most profitable
railroad freight operations anywhere in North America. On revenues in
excess of $2-billion, CN Rail expects to show a net operating income of
around $240-million and a bottom-line figure of about $180-million. The
return on net investment will be around 8.1 per cent.
What has produced this astounding show of productivity and profitability
on a railroad that just a few years ago was being held up as a horrible
example of the evils of Government ownership? There are several fairly
obvious answers to that question, and some that are not so obvious. One
has to do with an internal reorganization of the parent corporation
along profit-center lines. One of these profit centers is called CN
Rail.
Canadian National Railways is a Crown corporation, created 56 years ago
to bring together, under Government ownership, five railroads that were
struggling to avoid bankruptcy. Today, the name survives, but is
something of a misnomer. The corporation as it now exists is, in fact,
a far-flung and diversified enterprise that consists of eight separate
divisions.
The biggest and by far the most profitable of these is CN Rail, which is
almost solely in the freight business and whose performance therefore,
its managers believe, can fairly be compared with that of other freight
railroads.
Another division is the Grand Trunk Corp., which is Canadian National's
U.S. rail-freight operation and is also profitable. Still another is CN
Passenger, which is not profitable; its intercity passenger trains, and
its deficits, along with those of privately-owned CP Rail, are gradually
being taken over by a separate Government corporation called VIA Rail,
just as the money-losing passenger operations of U.S. railroads have
been taken over by Amtrak.
The corporation's other divisions embrace the telecommunications, hotel,
trucking, marine, and express businesses, some of which are profitable
and some of which are not.
It is this change in internal bookkeeping that now makes it possible to
segregate the winners from the losers — and to report, for example, a
separate financial statement for CN Rail.
But while a refinement in bookkeeping can identify a winner, it fails to
describe the winning game. The fact is, the rules of the railroad game
in Canada have been quietly, and significantly, changing for a number of
years. Canadian railroads now enjoy, for example, a substantial degree
of rate-making freedom — far more than their neighbors to the south.
And the Canadian Government has moved in other important ways, particularly
with respect to its own corporate creature, CN, to set the railroads
free in a free marketplace.
 For CN Rail, the warming of the regulatory climate in Ottawa has come at
a time when the seeds of technological change, planted years ago, have
also started to flower and bear fruit. Take, for example, CN Rail's
phenomenal (and that is really the only word for it) increase in freight-
car productivity. It is partly due to a gradual shift in CN Rail's
traffic mix toward the kind of commodities -- coal and potash, for
example -- that lend themselves to long hauls in unit trains. This
trend has, in turn, been helped along by a $300-million investment in
fixing up the railroad's mainline and yards between Montreal and Vancouver
so that they can accommodate 125-car to 130-car train-lengths.
But the productivity gain is due mainly to a quantum leap in car-handling
efficiency made possible by a new on-line computer system that cost
$55-million to develop and install and is now producing a return-on-investraent
estimated at 100 per cent. The system is called TRACS (for Traffic
Reporting and Control System). It is a refinement, for CN Rail's own
needs, of Southern Pacific's TOPS. With 95,000 freight cars on its
roster, CN Rail has been able to cut its active fleet to 75,000 cars and
consequently, through not having to buy additional cars, has saved
literally hundreds of millions of dollars.
A similarly upbeat tale can be told of locomotives. Largely due to the
improved utilization made possible by TRACS, CN Rail was able to cut 125
diesels out of its fleet last year, storing 33 and leasing 92 to other
roads, while handling steadily heavier traffic on its own lines.
Then there's the matter of a train-accident rate that has been more than
cut in half in just four years. This again can be attributed partly to
the investment CN Rail has made in improving its roadway. But most of
the credit must go to an engineman-training program, involving the
sophisticated use of locomotive simulators, that CN believes is second-
to-none in the world.
There are many other areas in which CN Rail excels in technical innovation.
It has developed, and installed on 400 locomotives, a Positive Traction
Control unit that is producing adhesion improvements, according to Chief
of Transportation R. A. Walker, in the range of 15-20 per cent. CN Rail
was the first railroad in North America to buy, and learn to use, Canron's
remarkable P-811 track-laying machine; with this equipment, CN Rail has
installed as many as 4,000 concrete ties a day, and easily averages
2,800, compared with a former maximum of around 1,200.
But old-line CN railroaders agree that the real story of this company's
remarkable turnaround must be told in terms of the turnaround in leadership that the railroad and its parent corporation have experienced since
1974. As one veteran CN Rail officer observed a few weeks ago, "we have
been developing the tools and the plant to run a good railroad for a
long time — but it has taken our new management team to tell us what to
do with them. They have told us, quite simply, that our business is to
make a profit."
Two brilliant young railroader/economists are at the top of this management
team: Robert A. Bandeen, 48, who is president and chief executive officer
of Canadian National Railways; and R. R. Latimer, 45, who is vice president
and senior executive officer of CN Rail.
 Bandeen has succinctly stated his own views on how a Government-owned
transportation business ought to be managed: "Nothing can waste public
money faster than a railway which is run without concern for profits and
productivity and which has to be subsidized out of the public purse."
Bandeen's latest success in an unrelenting effort to persuade the Government
to let Canadian National stand on its own two feet came last June when
Parliament approved a CN recapitalization bill, retroactive to Jan. 1,
1978.
When the recapitalization bill went through, the corporation's debt-equity
ratio flip-flopped overnight from 60-40 to 40-60. One result was a
quick beefing up of corporate earnings.
Another important victory for Bandeen in Ottawa came when the Government
agreed to create VIA Rail, thus following Washington's lead in relieving
railroads of the burden of unprofitable intercity passenger services.
The greatest single service Ottawa has performed for Canada's railroads
came nearly a dozen years ago with passage of the National Transportation
Act of 1967. That landmark legislation gave Canadian railroads the kind
of rate-making freedom that U.S. railroads are still fighting for.
Rad Latimer's thinking is closely attuned to Bandeen's, and the productivity — and profits — he has been able to wrest out of CN Rail have
themselves proved to be persuasive arguments in Ottawa. "It is our
contention," Latimer said during one of his own pitches for the recapitalization bill, "that the profits we make today would be much better
invested in helping build the railway system of tomorrow than paying for
decisions of the distant past."
CN no longer faces a starvation diet, but it still hungers for solutions
to inequities that continue to sap its strength. One inequity that both
CN Rail and CP Rail regard as particularly iniquitous involves the
so-called Crow's Nest Pass grain rates. Canada's railroads are required,
under these statutory rates, to haul western grain at the charges that
prevailed 90 years ago. This means, as someone observed the other day,
that while it costs 14 cents to send a letter from Red Bank, Alta., to
Vancouver, it costs only 12^ cents to send a bushel of barley the same
distance.
Bandeen has endorsed a proposal calling for a subsidy to the railways
covering the amount of the out-of-pocket losses as determined by a
Government commission.
Bandeen takes a similar position with respect to another thorny, unresolved problem — that posed by the 700 miles of narrow-gauge lines that
CN Rail operates in Newfoundland. Bandeen figures the loss on this
operation to be $25-million a year; he points out that a Government
investigation of transportation alternatives in Newfoundland has turned
up no real need for the railways there at all. Abandonment is a distinct
possibility in the near- to fairly-near future; meantime, Bandeen feels
that as long as the Government requires its nationalized railroad to
operate an uneconomic piece of line, then it is up to the Government —
and not the railroad's other customers — to pay for it.
 A third problem that Bandeen and Latimer are now confronting head-on is
the loss that CN has for years been swallowing on commuter service in
the Montreal area. The Province of Quebec this year paid the railroad
$2.4-million toward the loss, but recently announced that it did not
intend to make any further payments after December.
A few days later, CN Rail (which retains the financial responsibility
for commuter operations) announced that it would increase Montreal
commuter fares by 50 per cent on Jan. 1, 1979, to be followed by a
50-per-cent reduction in train frequency by Feb. 1. Another 25-per-cent
increase in fares will become effective July 1, followed by a 50-per-cent
reduction in remaining services Aug. 1. A final 25-per-cent increase in
fares is planned for January 1980, with complete elimination of service
by July 1.
Bandeen's direct methods of problem-solving are as well known within the
corporation as without. Consider, for example, his handling of a critical
manpower problem. When Bandeen became head of Canadian National, the
company had already gone a long way toward reducing employment. In
1956, which old-timers refer to as the company's "peak adverse year,"
there were 136,000 people on the payroll. By 1974, when Bandeen took
over, that figure had been reduced to 86,000. He thought it was still
far too high. This year, the corporation is getting along with around
78,500 people; about 50,000 are charged to CN Rail.
Further gains in productivity are in sight for CN Rail as the result of
a crew-consist agreement negotiated recently with the United Transportation
Union. The agreement is generally regarded as far better than similar
agreements that the Milwaukee Road and Conrail signed with UTU at about
the same time.
(Railway Age, Dec. 25, 1978)
XXX
AAA
CP RAIL MOVES OFFICE INTO GROWING MARKET
EDMONTON - Because CP Rail traffic volume in Edmonton is increasing
about 14 per cent a year, the company has moved its Alberta North Division superintendent offices from Calgary to Edmonton.
Last year, more than 180,000 cars moved in and out of the city, even
though it isn't situated on the CP Rail mainline. This growth-trend is
expected to continue well into the future.
"The traffic is up in this area. This is where the action is," says J.
M. (Jack) White, superintendent, Alberta North Division.
Last year, about 4.4 million tons of freight was handled by CP Rail in
Edmonton. Eleven new or relocated industries received CP Rail service
during the past year, with nine more planned for addition in the near
future.
The petrochemical industry expansion in the Fort Saskatchewan area,
plans for the Alaska Highway gas pipeline, talk of a Prince Rupert grain
 terminal, and the general economic bouyancy in the province, have prompted
CP Rail to put even more emphasis on its Edmonton-area operations.
When he was based in Calgary, White says he found he spent most of his
time in Edmonton area. Liquefied Petroleum Gas (LPG), chemicals, machinery,
pipe, cement ingredients, food products, and of course grain, form the
bulk of CP Rail's traffic in this area.
During 1979, more time will be devoted to the study of a $30-million
relocation of CP Rail's downtown Edmonton interchange yards at 104th
Avenue and 111th Street. A city study approved by council shows the
lines can be relocated, with financing by industrial and commercial
redevelopment in the area and without federal assistance.
The Clover Bar area east of the city is one possible relocation site.
But details must also be worked out with CN Rail on fees for handling CP
Rail cars in such a scheme. "On the surface, the move looks viable,"
White said.
"But we must consider the effect on customers," says Robert L. Provan,
manager of freight sales, Alberta. In some cities, there's more reason
to move the tracks to the suburbs where industries are relocating, he
adds.
(Edmonton Journal, Feb. 6)
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$9.5-MILLION SPENT BY CP RAIL IN 1978 QUEBEC WORK PROGRAM
MONTREAL - Approximately $9.5-million was spent by CP Rail on new railway
facilities in Quebec in 1978. This represents 75 per cent of CP Rail's
total capital expense budget of $12-million for the Atlantic Region,
which covers eastern Ontario, Quebec, the Maritime Provinces and the New
England States.
In Quebec, the money was spent primarily on rail, ties, ballast, machinery
and yard facilities.  The largest single expenditure was $3.3-million
for more than 275,000 railway ties which were replaced throughout the
province.
Approximately $2.2-million was spent to place 18.6 miles of new continuous
welded rail between Montreal and Farnham. Another $600,000 was spent in
various parts of the province for 20 miles of relay rail -- welded
sections of older rail relocated from disused sidings. Another $1.1-
million was spent to reballast 84 miles of mainline between Montreal and
the American border in Vermont.
The company also spent $845,000 for such track-maintenance machinery as
tampers, ballast machines, compactors, spike hammers and pullers.
At St. Luc Yard in Montreal, approximately $1.5-million was spent rebuilding and relocating the hump mechanism which is used for railcar
classification and train makeup. A number of classification tracks were
also relocated to improve the efficiency and throughput of the yard.
 10
This was the third year in a five-year, $8.5-million program designed to
upgrade the St. Luc Yard into one of the most efficient in North America.
(CP Rail Press Release, Feb. 9)
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WEST READY TO NEGOTIATE?
REGINA - Prairie Province delegates to the Western Agriculture Conference
here last week adopted a policy statement declaring that they are ready
to negotiate a new formula on the historic Crow's Nest Statutory Rate.
But the decision was far from unanimous and the Saskatchewan Federation
of Agriculture, spearheaded by the Saskatchewan Wheat Pool, stood adamantly
opposed to initiating any negotiations which might see Western grain
farmers shoulder any part of escalating grain-transportation costs over
and above the statutory rate.
The end result of the highly emotional debate now appears to be that,
while the resolution of indicating a readiness on the part of Prairie
farmers to renegotiate the Crow Rate will go forward to the Canadian
Federation of Agriculture annual meeting in Ottawa in mid-February, the
Saskatchewan Pool will divorce itself from that policy statement and
proceed directly to CFA with its own 'stand-fast' resolution.
(Manitoba Co-Operator, Feb. 1)
4. 4. 4.
AAA
FARMERS* SUPPORT OF CROW RATE EBBS
WINNIPEG - A survey by United Grain Growers shows that 45 per cent of
responding farmers are against changing the Crow's Nest Pass freight
rates, and 69 per cent are opposed to the Canadian Wheat Board purchasing
hopper cars.
"This represents the first time less than half the farmers in a sample
as large as this opposed an increase in freight rates on grain," UGG
president Mac Runciman said in a news release outlining the survey's
results. "Asked the same question five years ago, I would guess over 90
per cent of the farmers would have opposed an increase. It shows how
critical the transportation system appears to many farmers." The survey
questionnaire was mailed to 3,500 local board directors of UGG, and 646
replied.
(Edmonton Journal, Feb. 6)
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RAIL-LINE CUTS LEAD GROUP TO DEMAND BETTER ROAD
BRANDON, Man. - The first major economic effect of rail-line abandonment
may be felt sharply in several communities this spring when road restrictions
come into effect and grain quotas open.
 11
Six municipalities and two towns along Highway 250 saw the writing on
the wall three years ago and organized the "250 Committee," a group made
up mostly of farmers who recognized the need to upgrade the artery so
it could handle the increased grain-hauling traffic.
(Brandon Sun, Feb. 3)
POINTS THREATENED WITH RAIL LINE LOSS VOICE CONCERNS
SASKATOON - Almost every one of the 72 grain delivery points threatened
with loss of their rail line because of the Prairie Rail Action Committee
(PRAC) have relayed their concerns to provincial government officials,
George Burton, director of community services for the transportation
agency of Saskatchewan, said Feb. 1.
Burton said the communities are "really up in the air" about the report,
especially its assumption that removing rail service will have no effect
on their viability. The transportation agency now has three staff
members travelling the province offering help to community groups in
researching the case they will make for retention of their lines, when
their application for abandonment comes before the Canadian Transport
Commission.
Recently, Don Mazankowski, the federal Progressive Conservative transportation critic, said his party wishes to become the rallying point for
opposition in the communities involved.  "We'll be in there leading the
fight," he said.
(Saskatoon Star-Phoenix, Feb. 2)
PRAIRIE GRAIN ELEVATOR FADING INTO SUNSET
REGINA - The wooden grain elevator is fading from the Prairie landscape
into the history books.
And people are starting to miss them. There now are more than 3,600
licensed country elevators on the Prairies. But at their peak, about
1930, there were more than 5,700.
The Saskatchewan Wheat Pool, owner of the largest system, has a long-term
program to reduce the number of locations for its elevators to less than
500 from more than 800. The attrition, aimed at saving costs, has been
gradual.
But the Alberta Wheat Pool has announced that its staff and Buffalo
Engineering Ltd. of Edmonton has created a brand-new design. The new
model is about as high as the traditional elevator but nearly square in
layout and made of pre-cast concrete. It is expected to be safer and
more efficient.
(Regina Leader-Post, Feb. 1)
 12
BUDGET APPROVAL INCLUDES FUNDS FOR SHERBROOK-MCGREGOR PLAN
WINNIPEG - Winnipeg city council Feb. 7 approved $75.4-million worth of
capital spending for 1979, with $17.6-million earmarked for the construction
of the Sherbrook-McGregor overpass.
Council voted 18 to 5 against deleting the bridge project, despite opposition from residents' spokesmen and packed galleries. Swaying council's
decision was the Feb. 7 surprise announcement by Urban Affairs Minister
Gerry Mercier that the province would award the city $7.6-million in
federal Urban Transportation Assistance Program (UTAP) funds for the
project.
(Winnipeg Free Press, Feb. 8)
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STUDY PROPOSED OF HOPPER CARS
WINNIPEG - Transport Minister Otto Lang proposed Feb. 7 the establishment
of a task force named by federal and provincial transport ministers to
consider purchase of additional hopper cars to move grain.
The railways said at a Winnipeg conference last month that they may need
as many as 10,000 new cars by 1985 at a cost of $450-million.
Lang and Western premiers at the conference agreed to consider a Canadian
Wheat Board proposal to share in the cost. "I have proposed that a
committee of officials from federal and provincial governments make a
preliminary assessment of the financial arrangements of such a shared-
cost program," said Lang.
(Winnipeg Tribune, Feb. 8)
A"  A"  *
HOW TO OVERCOME GRAIN-EXPORT LAG
WINNIPEG - Prairie grain growers have plenty to worry about at this
point in time, just past the middle of the current crop year.
Exports are lagging seriously behind the corresponding period of the
1977-78 crop year, which ended last July 31. Even with the additional
2,000 cars the Wheat Board ordered last year, the grain-handling system
will be far short of the hopper-car fleet required, which is why this
week the Wheat Board announced a proposal for the purchase over the next
few years of a further 10,000 hoppers. If these aren't purchased,
Canada will experience a further erosion of grain exports, and this
country will be unable to take advantage of the continuing increase in
world trade of grain, the Board said.
(Winnipeg Tribune, Feb. 9)
 13
ALBERTA REJECTS HOPPER PLAN
EDMONTON - The Alberta government has rejected a federal proposal to
purchase grain-hopper cars.
In a telegram Feb. 9 to federal transport minister Otto Lang, Premier
Peter Lougheed said Alberta disagreed with the plan because "it fails to
deal with the total problems of the grain-transportation system."
(Winnipeg Free Press, Feb. 10)
LYON WANTS NO PART OF GRAIN-CAR BUYING PLAN
WINNIPEG - Manitoba has told the federal Government it is not interested
in participating in a federal-provincial task force on the purchase of
railway hopper cars for grain movement, Premier Sterling Lyon said Feb. 9,
The Premier said the Manitoba government took the stand in response to a
call for a federal-Prairie Provinces joint study on possible cost-shared
hopper-car purchases received recently from Otto Lang, federal minister
responsible for the Canadian Wheat Board.
(Winnipeg Free Press, Feb. 10)
SASKATCHEWAN READY TO JOIN TASK FORCE
WINNIPEG - Saskatchewan is ready to join in a study proposed by the
Canadian Wheat Board for the federal Government and grain-producing
provinces to jointly buy rail-hopper cars, says Gordon MacMurchy, minister
responsible for transportation.
In a letter to federal transport minister Otto Lang, MacMurchy said that
Saskatchewan is willing to be part of a task force to look into the
proposal.
(Winnipeg Free Press, Feb. 10)
VIEWS ASKED ON PRODUCER CARS
EDMONTON - The Canadian Grain Commission is inviting individuals or
organizations to submit their views about producer grain cars.
The Commission has set up a producer study committee to examine all
aspects of the issue because it is afraid that the "farmer's right to a
car might be lost in the name of efficiency," said the Committee's
chief.
(Edmonton Journal, Feb. 9)
 14
NEW TRAINING CENTRE OPENED BY CP RAIL
MONTREAL - CP Rail has opened a new $200,000 track-maintenance training
centre at its St. Luc Yard in Montreal. The new centre is one of four
specialized maintenance-training facilities operated by the railway
across Canada and is designed to provide theoretical and practical
training for maintenance-of-way personnel.
The training centre consists of two structures covering approximately
7,000 square feet. One building houses two classrooms and offices while
the second contains tracks, signals and other equipment to simulate
actual track conditions. Courses last approximately three weeks with
heavy emphasis on standard track-maintenance procedures, track motor-car
operation, first aid and comprehension of the Uniform Code of Operating
Rules.
"In the past, personnel were trained on the job. However, with rapid
advancements in track and equipment technology, training centres have
taken over the job of keeping employees informed and properly trained,"
said R.E. Grant, regional engineer, CP Rail.
At the St. Luc maintenance training facility, two-thirds of the course
is devoted to classroom instruction, with the remainder being practical
training in the adjoining shop. In the classroom, students are taught
the various requirements of their jobs, including complete comprehension
of all rules and regulations, track-rebuilding blueprints and various
track-construction techniques.
The 'shop' portion of the course involves giving employees a blueprint
from which they are expected to construct a complete railway line.
Employees are also instructed in the operation and testing of highway-
crossing signals. Other subjects taught in the shop include the proper
use of railway telephones, operation of handcars, and detection of
broken or worn rails and ties. A display area has been set aside
specifically to show the various types of worn or defective rails and
ties.
Students at the St. Luc maintenance training school are from CP Rail's
Atlantic Region which covers parts of Ontario, Quebec, New Brunswick,
Nova Scotia, Maine and Vermont. CP Rail supplies transportation,
accommodation and meals to all employees sent to the training centre.
The railway has approximately 5,100 personnel involved in maintenance-
of-way functions, of which 1,100 are in the Atlantic Region.
(CP Rail Press Release, Feb. 12)
COMING ... A TRAIN JUST LIKE A PLANE
MONTREAL - VIA Rail will start testing in early 1980 the 10 new LRC
trains for which it paid $90-million to Bombardier-MLW Ltd. of Montreal.
The first LRC -- the initials stand for Light, Rapid, Comfortable —
will probably enter service on VIA's routes between Montreal, Quebec
City and Ottawa -- close to both the manufacturer and VIA's head office
in Montreal.
 15
The 22 locomotives and 50 carriages will be the first modern equipment
bought for Canadian rail passengers in 25 years.
(Montreal Gazette, Feb. 9)
A   A   A
NEW SIBERIAN RAILWAY TO SPEED MINERAL AND OIL EXPLOITATION
BERKAKIT, U.S.S.R. - The Baikal-Amur Mainline, or BAM Railroad, will
stretch almost 2,000 difficult miles across the outback of easternmost
Siberia — from Lake Baikal, the world's deepest lake, to the Amur
River, near the Pacific Ocean. It is slated to be completed in 1983, at
a cost estimated by Westerners at more than the equivalent of $10-billion.
BAM is an epic construction project. It snakes over permafrost and
mountain peaks; across seismic zones that threaten lethal earthquakes,
through snowslides, rockslides and mudslides. Winter temperatures
sometimes reach 85 degrees below zero, summer ones sometimes top 100
degrees. The land is beautiful, but impossible.
All that effort has its reasons. The Soviets expect BAM to be a key
transportation and supply route. They intend to use it, for instance,
to ship oil produced in western Siberia to Pacific Ocean ports. BAM
also is militarily important, being farther north than the Trans-Siberian
Railroad, which runs uncomfortably close to the Chinese border.
BAM's greatest import, perhaps, is that it is opening up for development
vast stretches of Siberian wilderness, land that is unusually rich in
resources but that until recently was almost inaccessible.
(Wall Street Journal, Feb. 8)
RAIL DEREGULATION CALLED DISASTER FOR FARMERS
CHAMPAIGN, 111. - Complete deregulation of the railroad industry could
lead to higher freight rates, more branchline abandonments, and disaster
for agriculture, an Illinois Farm Bureau official said.
"If deregulation were put into effect, rail service to agriculture would
be drastically reduced and prices for it would be drastically increased,"
said Robert Graves, who also serves as traffic director for FS Services
in Bloomington. "In a very short period of time, there would be few
country elevators left and the small or family farm would become a thing
of the past."
Shippers on branchlines can work together to stop railroads from abandoning
potentially-profitable routes, Graves said. "The railroads have put
together abandonment teams that are hard to beat," Graves said. "If the
users want to successfully fight the railroads, they must organize and
fight fire with fire."
The subject of branchlines came up often during the meeting. Many
small, rural grain elevators are located on branchlines and depend on
 16
trains to carry grain to larger markets or ports for overseas shipment.
Graves said that not all branchlines can be saved. Many railroads have
allowed the track and roadbed to deteriorate for so many years that it
is not financially feasible to improve them now.
(Chicago Tribune, Feb. 1)
WHAT SHIPPERS EXPECT IN '79
BRISTOL, Conn. - This year, Railway Age asked rail customers what they
believe will happen to the economy in 1979; as it turns out, shippers
are no more sure than most of the country's economists seem to be.
First, the numbers on traffic. Exactly half of the shippers replying to
the poll see a bigger demand for transportation services coming in '79,
with just 10 per cent figuring that demand will be smaller. For railroads,
however, it's a mixed bag, because while all those shippers think total
transportation demand will go up, only about one-fifth see railroads
hauling proportionately more of their business. Well over one-half, 55
per cent, see railroads holding their own in market share — but almost
one-fourth see rails dropping down in share of traffic.
What do railroads have to do to boost market-share? Some shippers say,
simply, "improve service." Others elaborate, with a wide range of
specifics. Despite the higher rate of freight-car deliveries in 1978
and the bulging order books going into '79, some shippers are deeply
concerned about car supply (and based upon customer comments, maybe
there will be enough traffic to keep busy all the new boxcars now on
order).
D. C. Warrington, manager-traffic, Amoco Oil Co., Chicago, says: "To be
able to afford to improve roadbeds, track, and equipment, railroads are
going to have to be able to charge rates and handle traffic that will
generate the revenue they need to do the job. The alternative is to
seek Government aid, which has historically been too little and too
late. The revenue needs of the railroads have not been given realistic
consideration up to now, and this is one of the many regulatory matters
that need to be changed. In my opinion, the decisions that will be made
over the next few years on the amount of regulation that is appropriate
for railroads might very well be the decisions that determine whether
the railroads will survive as private corporations."
(Railway Age, Dec. 25)
STRONG MEDICINE FOR CONRAIL
(By Jervis Langdon, Jr., a former trustee and
president of Penn Central Transportation Co.)
NEW YORK - That Conrail has failed as a solution to the northeastern
railroad problem should come as no surprise. Nevertheless it is hard to
believe how bad its performance has been.
 17
During the first 30 months (April 1, 1976, to September 30, 1978) its
losses on an ICC basis averaged $1.75-million per day, or more than
twice the aggregated losses (during the three-year period 1973 to 1975)
of the five major bankrupts it took over.
But it is in service to the public, as measured by on-time performance
of its freight trains, where Conrail's failure is the most evident. As
set forth in the 1977 report on Conrail by the United States Railway
Association (USRA): "Conrail has provided poor service, and its customers
have turned to competing rail carriers as well as other modes. A key
measure of service performance -- the proportion of loaded cars which
arrived no more than one day behind schedule — has deteriorated substantially since Conrail began operations."
Conrail shippers in growing numbers are complaining of car shortages,
and on branchlines under subsidy, the States are turning increasingly to
short-line operators because of their dissatisfaction with Conrail
service.
Finally, there is the question of rail market-share. The decline in the
east continues under Conrail. Of the total revenue ton-miles of the
country's Class I railroads, Conrail's proportion has been going down
steadily -- 11.9 per cent in 1976; 11.1 per cent in 1978; and 10.3 per
cent during the first half of 1978.
While rail tonnage in the east has been falling, truck tonnage in the
same region has been steadily increasing, almost tripling since World
War II. It is thus not possible to ascribe all of Conrail's falling
volume to a stagnant economy in the Northeast. Truck tonnages in the
west and south have been growing too, but so have railroad ton-miles.
In these distressing circumstances, what should be done about Conrail?
As the situation stands now, Conrail's nationalization appears inescapable.
But before this fateful, expensive step is taken, deregulation should be
tried. If this is regarded as too debatable to involve all railroads,
Conrail or its territory would be an ideal subject for testing. Conditions
there could hardly be worse, and any change — even if radical — should
be for the better. Moreover, Conrail's principal competitors with their
huge coal volumes, would probably gain from Conrail's deregulation.
In any event, private enterprise should be given a chance. The public
can protect itself in the continuance of unprofitable rail service by
tendering an adequate subsidy and do so at a much less cost than nationalizing
Conrail. If deregulation fails, nationalization is the only recourse if
basic services are to continue.
(Wall Street Journal, Feb. 7)
 18
CANADIAN CARLOADINGS
For 10 days Ending
Jan. 31, 1979
Change from Similar
Period, 1978
Percentage
Change
Carloads
Volume (Tons)
Piggyback
104,875
6,658,359
10,796
1,126
(85,596)
771
1.1
(1.3)
7.7
Total for Year to
Jan. 31, 1979
Change from Similar
Period, 1978
Percentage
Change
Carloads
Volume (Tons)
Piggyback
289,604
18,669,365
29,692
6,525
427,029
1,083
2.3
2.3
3.8
U.S. CARLOADINGS
For Week Ending
Feb. 3, 1979
Change from Similar
Period, 1978
Percentage
Change
Carloads
Volume (Ton-Miles)
412,079
15.5 billion
49,193
1.5 billion
7.1
10.4
Total for Year to
Feb. 3, 1979
Change from Similar
Period, 1978
Percentage
Change
Carloads
Volume (Ton-Miles)
1,976,091
74.2 billion
231,745
8.3 billion
13.3
12.5
Total for Year to
Jan. 27, 1979
Change from Similar
Period, 1978
Percentage
Change
Piggyback
117,687
576
0.4
( ) Decrease
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TOURISM & TRAVEL
CN CONSIDERING RIDEAU CENTRE
OTTAWA - CP Hotels may not want to build a hotel as part of Ottawa's
controversial Rideau Centre project, but CN Hotels might want a crack at
it.
Regional Chairman Andy Haydon said Feb. 7 that a meeting was held Feb. 6
in which project officials put a sales pitch on the Rideau Centre concept
to CN representatives. Haydon said as far as he knows, no market studies
have been done to determine the viability of another hotel in that area
and he expects that CN would conduct such a study before making any kind
of commitment.
(Ottawa Journal, Feb. 8)
~J
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LABOR
WAGE PACTS SPARK NEW INFLATION FEARS
OTTAWA - The spectre of a new wage-price bubble loomed Feb. 8 as the
federal inflation monitoring agency reported a new upward trend in wage
increases.
The Centre for the Study of Inflation and Productivity said that while
wage increases of teachers and construction workers were generally moderate, higher increases to workers in supermarkets were "a very serious
development."
The centre cited 10.9-per-cent wage increases to 10,300 Ontario employees
of Dominion Stores Ltd. and a Steinberg's settlement with 6,500 Montreal
employees for increases ranging from 10 to 14.4 per cent as being considerably above average.
Meanwhile, Finance Minister Jean Chretien told the Commons finance committee that wage settlements in major collective agreements accelerated
to an average annual rate of 8.5 per cent in the fourth quarter of last
year.
(Globe and Mail, Feb. 9)
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RAILWAY CLERKS' UNION TAKES STEP TOWARD A NATIONWIDE STRIKE
WASHINGTON - The railway clerks' union, which crippled most of the
nation's rail service in a four-day strike last fall, put machinery in
motion Dec. 18 for a possible nationwide rail strike in mid-March.
Under complicated procedures of the National Railway Labor Act, the
action means the union is free to strike after a 30-day cooling-off
period that can be extended another 60 days by presidential order, for a
total of 90 days.
(Washington Post, Dec. 19)
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U.K. UNIONS LAUNCH NEW STRIKE OFFENSIVE
LONDON - Public-service unions launched a new offensive against the
Labor Government's crumbling pay curbs Feb. 12, hitting hospitals,
ambulance services, cemeteries, garbage collection and locking an estimated million children out of school.
With no sign of a breakthrough in pay negotiations, trade unions representing the 1.5 million workers ordered more strikes, particularly in
northern England.
(Montreal Gazette, Feb. 13)
 20
AVIATION
'PEOPLE'S AIRLINE' MAY COME UNDER PRIVATE OWNERSHIP
MONTREAL - The federal Government may want to sell a part interest in
Air Canada to the private sector within five years as the next major
step in the airline's corporate evolution, says Claude Taylor, president
and chief executive officer.
And further down the line it might be desirable for Ottawa to sell the
balance of its shares, he said in a recent interview. "I believe if we
can show during the next five years that we can operate in the private
sector, under the rules of the private sector," Taylor said, "it would
be a good thing if the shareholder (Ottawa) then chooses to sell — not
the whole thing all at once, but probably in stages."
That would be a natural outgrowth, the 53-year-old Taylor noted, of the
airline's recent financial restructuring under the Air Canada Act passed
by Parliament a year ago. That transformed Air Canada from a subsidiary
of Canadian National Railways into a separate corporation with a favorable
60-40 debt-equity ratio and most of the corporate powers of a private
company.
(Edmonton Journal, Feb. 6)
DRINKS ON DUTY DANGEROUS MIX FOR AIR CREWS
OTTAWA - Alcohol consumption by members of flight crews is "unofficially"
a contributing factor in a "large percentage" of aircraft accidents, a
Government task force states in a preliminary report. While federal
air-safety legislation prohibits pilots from serving as crew members
within eight hours of consuming an alcoholic beverage, Transport Canada
inspectors are virtually powerless to enforce pertinent regulations,
says a section of the report obtained by The Citizen.
The report, copies of which have been circulating in Transport offices,
was prepared by the seven-member Aeronautics Act Task Force which has a
mandate to recommend revisions to outdated aviation legislation. A
related problem is the abuse of prescription drugs which can have a
detrimental effect on pilots in the rarefied atmosphere of high altitudes.
There's also concern that use of illicit drugs is growing among pilots,
a situation inspectors have no method of attacking due to the non-existence
of enforceable legislation.
(Ottawa Citizen, Feb. 9)
X X x
A   A   A
WARDAIR FARES TO U.K., RETURN, TO COST $299
TORONTO - Wardair International Ltd. of Edmonton, the country's largest
charter carrier, has announced it will match the $299 return Toronto-to-
Britain fare offered by Air Canada and British Airways last week. On
Feb. 9 both Air Canada and British Airways dropped their charter class
fares on scheduled flights to $299 with the 90-day advance booking period.
(Globe and Mail, Feb. 13)
 21
PIPELINE
ALASKA GAS PIPELINE FACES COSTLY DELAY
WASHINGTON - The U.S. sponsor of the Alaska Highway natural gas pipeline
announced Feb. 2 a new setback in the proposed starting date for the
multi-billion-dollar project.
A Northwest Alaskan Pipeline Co. spokesman said the target for Alaska
gas to begin moving through Canada to the lower 48 States has been put
back until middle or late 1984. The company said in a statement the
1984 target will only be reached, however, if U.S. federal and Alaska
officials move speedily to resolve a number of crucial issues.
(Montreal Gazette, Feb. 13)
DELAY PREVENTS SETTING GAS PRICE
OTTAWA - Energy Minister Alastair Gillespie told the Commons that the
delay in setting costs to producers in Alaska must be settled before
financing plans and costs to consumers can be determined.
Gillespie said the Government is concerned about delays in the U.S.
concerning the construction of the northern natural gas pipeline and
hopes the matter can be resolved as soon as possible.
The minister was referring to a preliminary ruling by the U.S. Federal
Energy Regulatory Commission that producers of Alaska's natural gas, not
sponsors of the $12-billion pipeline, should pay the costs of conditioning
the fuel for shipment to the lower 48 States.
Gillespie said that until the issue is settled and the related issue of
price to consumers, "it's going to cause difficulties and delays and it
will not be possible to put a financing plan into place."
(Montreal Gazette, Feb. 13)
MEXICO WON'T SELL ITS GAS TO THE U.S.
MEXICO CITY - Mexico will not sell natural gas to the U.S., a Government
official said Feb. 12, despite U.S. predictions that a major agreement
will come out of this week's talks between President Carter and President
Jose Lopez Portiflo.
Five U.S. utilities signed letters-of-intent with Mexico in 1977 for the
purchase of two billion cubic feet of natural gas per day. The Carter
Administration blocked the sale because the price — $2.60 per 1,000
cubic feet of gas — was higher than the $2.16 rate then being paid for
Canadian gas.
(Montreal Gazette, Feb. 13)
 22
WESTERN OIL OUTPUT RISING TO EASE POTENTIAL SHORTAGE
CALGARY - Western Canadian crude oil production is being increased to
help avoid a potential emergency situation in feedstock supplies at some
U.S. and eastern Canadian refineries.
The Alberta Energy Resources Conservation Board has authorized the production of an additional 60,000 barrels a day of crude, bringing output
to 1,235,000 barrels a day, said to be close to the limits of production
as permitted by standard conservation practices.
(Globe and Mail, Feb. 13)
ENERGY ALLIANCE PROPOSED
WASHINGTON - Sen. Wendell Ford, D-Ky., said the U.S. should immediately
begin exploring the possibility of a North American Energy Alliance with
Canada and Mexico.
"The known existence of extensive energy supplies in both countries
should force a serious re-evaluation of our relations with both countries,"
Ford told the Missouri Oil Jobbers Association. "There will be many
hurdles to overcome, not the least of which is the idea of playing one
country against the other for a lower price, instead of seeking to find
a mutually-acceptable middle ground with parity for all," Ford said.
(Montreal Gazette, Feb. 13)
TCPL PROPOSES JOINING NORTHERN BORDER PIPELINE GROUP
OTTAWA - TransCanada PipeLines Ltd. of Toronto has proposed joining the
U.S. group planning to build the Northern Border Pipeline portion of the
$ll-billion-plus Alaska Highway natural gas pipeline facilities.
However, it attached a condition to its participation: that the U.S.
members of the group agree to study the advantages and disadvantages of
an alternative scheme to use expanded existing pipelines for carrying
Alaskan gas on the last leg of the journey from Alaska to U.S. Midwest
markets, instead of building a new Northern Border Pipeline.
The existing pipeline system, operated mostly by TransCanada in Canada,
is being used now to transport Alberta gas to the U.S. Midwest. It is
also being considered for use in many Alberta gas-export proposals now
before Canadian regulatory agencies.
(Globe and Mail, Feb. 8)
COAL-SLURRY PIPELINE STUDIED
SALT LAKE CITY - Three areas in Utah are the objects of an extensive
study to determine the feasibility of constructing a coal-slurry pipeline
 23
from Utah to the California coast for shipment of 10 million tons of .
Utah coal annually, The Tribune learned Jan. 25.
Once the coal reaches the coast, under the proposed scenario it would be
loaded on freighters and shipped to Japan and other Asian markets. If
the plan ever gets off the ground, it would be of major significance to
Utah, because the amount of coal needed from the state for the project
exceeds the total tonnage of coal currently mined in the state. Last
year only about nine million tons were mined in the state.
The feasibility study is being conducted by Boeing Engineering and Construction Co., Seattle, Wash., a wholly-owned subsidiary of the Boeing
Co.
(Salt Lake Tribune, Jan. 26)
XXX
A   A   A
BUSINESS & FINANCE
CANADIAN PACIFIC LIMITED REPORTS PRELIMINARY EARNINGS
MONTREAL - Canadian Pacific Limited Feb. 12 reported the highest earnings
in its history. Preliminary net income for 1978 amounted to $341-million,
or $4.72 per Ordinary share, compared with $247.0-million, or $3.41 per
share, in 1977. Earnings for 1977 included extraordinary income of
$7.2-million from the sale of a subsidiary of Canadian Pacific Investments
Limited.
Net income for the fourth quarter of 1978 was $107-million, up from
$59.5-million in 1977. Fourth-quarter earnings for 1978 included the
company's equity in a net gain of $23.8-million on the sale by CP Investments
of its interest in TransCanada PipeLines Limited.
The improvement in the year's earnings was almost equally attributable
to CP Investments and transportation.
Most operations of CP Investments achieved higher earnings in 1978, with
the largest increases coming from iron and steel, oil and gas, and
forest products. The only major decline was in hotel results.
In the transportation sector, income from CP Air was up sharply, due
mostly to increased traffic and improved passenger yields. Both CP Rail
and the Soo Line Railroad had record earnings, reflecting strong traffic
volumes and higher prices. CP Ships continued to incur a loss, although
less than in 1977.
In 1979, earnings are expected to be at about the same level as in 1978,
notwithstanding that results in 1978 included the gain on the sale of
TransCanada PipeLines' shares.
Planned capital expenditures of the Canadian Pacific group of companies
for 1979 exceed $l-billion for the first time. This investment program
 24
will benefit many different sectors of the economy and many different
areas of the country.
The company's annual report is to be issued at the end of March.
(Canadian Pacific Press Release, Feb. 12)
* * *
THE CORPORATE IMAGE: PR TO THE RESCUE
NEW YORK - Increasingly, corporate leaders are becoming convinced that
an organized and systematic program to win friends and influence people —
that is, public relations or PR — is the remedy for the varied tribulations
that beset their companies.
The corporate public relations business, which has had its ups and downs
in the past few decades, is enjoying a new boom. Companies that slashed
budgets during the 1974 recession are resurrecting their programs, many
are increasing expenditures and expanding the scope of PR operations,
and others are elevating the PR function to a loftier rung in their
organizational hierarchies.
The primary reason for the revival is that the corporation, more than
ever, is operating in what David I. Margolis, president of Colt Industries
Inc., calls a "pressure-cooker" environment. It is under siege from
consumerists, environmentalists, women's liberation advocates, the
civil-rights movement, and other activist groups. Their demands are
being steadily translated into an unprecedented wave of intervention by
federal and state governments into the affairs of business.
The corporation also faces intensified competition in the marketplace,
the growing threat of takeover by outsiders, and new challenges in
employee relations. And all the while, the corporate community continues
to be plagued by a negative public image. Only 22 per cent of the
general population has confidence in business leadership, down from 55
per cent at the beginning of the decade, according to pollster Louis
Harris.
As a result, the corporation has become more conscious of using communications in all its diverse forms as a tool to accomplish its objectives,
and it is articulating its positions more clearly and urgently to government
agencies, legislators, shareholders, employees, customers, financial
institutions, and other critical audiences.
As the tempo of corporate PR activities rises, the very nature of the
profession is changing profoundly. What was once scorned as press
agentry and flackery and dismissed as a peripheral function of management
is becoming a more consequential endeavor worthy of serious attention by
senior management.
"PR used to be mainly how to get information into the media without
having to pay for it," Edmund T. Pratt Jr., chairman of Pfizer Inc.,
says. "The aim was to get your name around and to get publicity for a
S
 25
new product and build a corporate reputation. We're now talking about
much more sophisticated attempts to interact on issues of greater subtlety
in quite different ways." Pratt and many other top executives prefer to
call what they are doing "public affairs" rather than "public relations."
Because PR's end-product is normally intangible, practitioners of the
craft are also hampered by the absence of satisfactory means to measure
quantitatively the effectiveness of what they do.
Call it "PR" or "public affairs," most major corporations are making a
carefully-planned effort to communicate with multiple audiences, influence opinion, and create an environment more favorable to what they
perceive to be their direct interests. They are taking PR far beyond
the traditional functions of image-building and getting the company's
name in the paper — or keeping it out.
Corporate involvement in public issues is not exactly new. Business
lobbying is as old as the nation itself. What is new is a determination
to identify budding political and social pressures before they get out
of hand and to prepare a defensive corporate strategy in advance.
"PR can establish an early-warning system to alert management to the
things they're going to get nailed on," says New York public relations'
firm Carl Byoir & Associates' president, Robert J. Wood. PR men describe
such efforts as "issue management" or "issue analysis," which have
become the latest buzzwords in the business.
An important manifestation of the growing sophistication of PR practice
is the increased personal involvement of chief executive officers.
Public-relations men are striving to give an intellectual substance to
what they do. They are moving away from the seat-of-the-pants approach
that has characterized their activities in the past and are trying to
adopt long-range planning and other apparatus of modern management. In
the process, new conceptions are evolving as to what PR is, extending
beyond the traditional functions of media, community, employees, and
financial relations.
In the employee-communications field, PR techniques are changing as
management recognizes it is dealing with a labor force that is more
sophisticated and has greater personal expectations than an earlier
generation. Another stimulus for change has been the rash of mergers
that bring new employees into companies they know little or nothing
about.
As a result of such trends, house organs are becoming more journalistically
professional, with an orientation more substantive than bowling scores.
Audio-visual facilities are being introduced more widely, the tone of
communications is changing, and employees are being kept better informed
on everything from fringe benefits to management's assessment of the
business outlook.
(Business Week, Jan. 22)
 26
NEW CPI SUBSIDIARY
MONTREAL - Interpace Corporation of Parsippany, New Jersey, and Canadian
Pacific Investments Limited, announced Feb. 9 that agreement in principle
has been reached on purchase by a wholly-owned U.S. subsidiary of CP
Investments of the Carey Salt and Wollastonite Divisions of Interpace.
Closing, expected in late March, is dependent on completion of a purchase agreement and all necessary governmental approvals.
Interpace's Carey Salt Division is based in Hutchinson, Kansas, and its
Wollastonite Mining and Beneficiation Division in Willsboro, N.Y. Carey
produces evaporated and rock-salt products for markets in the Midwest
and southeastern United States. Wollastonite is a mineral sold worldwide
for many extender and filler applications. Terms of the transaction
were not disclosed.
(News Release: Canadian Pacific Investments Limited, Feb. 9)
* -A- *
GREAT LAKES EARNING PICTURE BETTER IN 1978
THUNDER BAY - Two familiar factors helped to improve the earnings'
picture for Great Lakes Forest Products Ltd., formerly The Great Lakes
Paper Co. Ltd., during 1978.
In a year-end statement, the firm says higher shipments for all products
and an increase in U.S. dollar-exchange premium led the company to a
new-high level of earnings last year. The Thunder Bay-based forestry
firm earned a net sum of $20,313,000 in 1978 compared with $14,317,000
the previous year. This resulted in per-share earnings of $5.63 for
1978 as compared to $3.97 in 1977.
Net sales amounted to $277,362,000 in 1978; the 1977 figure was $241,448,000.
The firm chalked up $36,427,000 in working capital last year, about
$10-million over 1977. The quarterly-dividend rate was increased to 25
cents from 15 cents a share at a directors' meeting on Jan. 31. The
next dividend, payable April 2, 1979, to shareholders of record March 2,
will be at the new rate.
(Thunder Bay Chronicle-Journal, Feb. 1)
JL JL J.
PANCANADIAN PETE EARNINGS TOP $143-MILLI0N
CALGARY - PanCanadian Petroleum Ltd. has reported its profit last year
totalled $143.5-million or $4.60 per share, a 13-per-cent increase from
its 1977 profit of $126.5-million, or $4.05 per share. Gross revenue
totalled $333.8-million, up from the previous $301.3-million, while
funds from operations rose to $212.6-million from $186.1-million.
Capital expenditures last year totalled $341.7-million, including $l63-million
paid for an interest in the Syncrude Canada Ltd. oil sands project, and
$125.7-million for exploration activity. PanCanadian had capital expenditures
totalling $113-million in 1977, including $51.1-million for exploration.
(Calgary Herald, Feb. 7)

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