CANADIAN MONOPOLIES NEXT TO GO 

After 70 long years of Soviet state monopolies, the world's leading socialist state has seen the light. Governments can't run businesses. The U.S.S.R. has proposed to sell two-thirds of the nation's holdings to the private sector in the next five years for close to $300 billion. Presumably the rest will follow. On the question of whether bureaucrats can even continue to run the government, the jury is still out.

Now that the Soviets are working towards a new economic order, who's next? Would you believe Canada?

Canada's monopolies are wide-spread. Ranging from Canadian telephone and power-generating monopolies to the multitude of marketing boards covering milk, cream, cheese, eggs, chicken, apples and other fruits, wheat and a long list of other grains, Canadian monopolies are everywhere. Canada Post is probably the most intrusive with a monopoly on delivery of first class mail. Products most Canadians travel across the U.S. border to purchase are those protected by monopoly or a marketing board or taxed excessively, like cigarettes and liquor, by provincial and federal governments. Like any third world country the net result is a rapid growth in the smuggling industry. Since no government in the world has been able to stop that occupation Canadians shouldn't be too optimistic that their government can do any better. On top of these controlled products are inter-provincial trade restrictions. Canada, long an advocate of free trade in a worldly context just doesn't practise that faith at home. Witness our inter-provincial beer regulations.

The change will herald a chaotic and turbulent ride into this new world order. Competition of a magnitude never seen before in Canada is already moving into place. Like the single shot fired in Sarajevo, Yugoslavia that started World War I in Europe in 1914, the conductor of a waiting economic orchestra just across the border was poised for the critical signal from here. It happened, in Ontario, and life in Canada will never be the same.

A newly-installed government in the province on Ontario acted quickly upon taking over the reins of power with an almost double-digit billion-dollar provincial deficit. Instantly, world credit organizations downgraded ratings making debt in Ontario even more costly. The new government also proposed legislation that would, in effect, eliminate the security of limited corporations by making officers and anyone doing the work of an officer (a bookkeeper who signed a check?) personally responsible for everything -- wages, vacation pay, severance and retraining pay and a range of other possibilities -- should business fail. Screams on that matter caused the new government to retreat rapidly. But the psychological damage fired by that "bullet" of pending legislation had already reached its mark.

The states of Illinois, Michigan, New York, Ohio, North Carolina and the Council of Great Lakes' Governors stepped up campaigns to lure Canadian businesses to their shores. A couple of U.S. states already had small or token offices in Ontario. New York had a substantial base there and it has paid off so well it has been constantly upgraded. Now other states are moving into new Ontario offices along with organizations to "steal" away Canadian companies having a tough time surviving in a tax-heavy Ontario and Canadian environment. California and New Mexico are expected to open offices early next year.

Who else may come isn't known today but by the end of this year another half a dozen states may be setting up nets in Ontario ... and other provinces as well. Nobody can stop that. Both the Canadian federal government and many Canadian provinces have been doing this in the United States for decades. Now, the competition strikes back.

What can American states offer Canadian companies that Canadians can't find even in Canada's richest and most populous province? Let me list the jewels:

1. In Buffalo the cost of real estate runs around one-tenth land prices in Metropolitan Toronto. New York State ads say so.

2. Advertisements from the State of North Carolina say a great deal more: "Come to North Carolina -- a right-to-work state, where nobody can be made to join a union."

3. And from the newly-opened office of the resort state of Florida, "Move your new plant to Florida, where there is no state personal income tax and the corporate tax rate is five-and-a-half percent." Am I getting your attention? Florida is in the best position, with 2.2 million Canadians already going there for vacations each year who spend $2.5 billion in the process. Larry March, Director of the Florida State office in Toronto says "It's not like we have to dangle money in front of them to entice them to come." March told me he has already "spoken to 500 companies and 70 have now gone to Florida to check out the possibilities."

Canadians have so far failed to realize that it is now a one-world marketplace. Individuals, companies, and corporations that existed in a tax-protected and tax-subsidized environment are on the endangered list. Today it isn't just spotted owls that make such lists. You, your company or corporation and livelihood are at stake.

If any product or service can be manufactured or provided cheaper from somewhere else in the world (made by human or robot, imported or provided electronically), that is competition -- not the sawmill down the street or the local phone company. And, the public will buy the least expensive product, consistent with equal quality and service. This is especially true in countries where wealth-creating industries and workers find income greatly reduced by onerous federal and provincial taxes. In Canada we have already lost quality and service. We will be hit hard.

We have heard complaints for years -- high taxes and high wages. Unnecessary bureaucracy at the border (brokerage costs up to 600 percent higher to clear goods northbound than southbound), high transportation costs, equal pay legislation and additional hidden costs caused by an uncaring post office not to mention disruptive labor disputes and lack of labor flexibility. We did nothing about it. We are about to pay a heavy price.

A Canadian manufacturer, who for years has been purchasing more than 50 percent of raw materials from the United States and who has from one-third to two-thirds of his business in the U.S., simply can't hack the new-found competition with high Canadian costs. In many cases he must emigrate or evaporate.

The trend will not stop with the current invasion into Ontario. Businesses located in any Canadian province are now on somebody's "hit list". Other Canadian provinces are not likely to follow the examples of New York and Florida and open their own offices in Ontario, because that isn't "nice". That wasn't the rules of the game they were taught. Unfortunately, not only the rules have changed but the very game itself has changed -- and Canadians are not aware of that fact.

The U.S.R.R. has seen the light. Are Canadians myopic? If our monopolies aren't opened up they will be bought up -- and quite likely operated from a foreign land.

More information: New York State Office of Economic Development: 416/868-6935 Florida : 416/926-1590 Illinois: 416/365-9888 Michigan: 416/369-9630 Ohio: 416/351-0060 North Carolina: 416/369-9644 Council of Great Lakes' Governors: 416/368-6956

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