BUSINESS

Business Notes

August 12 1991
BUSINESS

Business Notes

August 12 1991

Business Notes

MORE GOOD NEWS

Canada’s economy expanded strongly for the second consecutive month in May, indicating that the recession is almost certainly over. Philip Cross, Statistics Canada’s director of current analysis, said that the 0.6-per-cent May increase in the gross domestic product effectively “guarantees growth for the second quarter.” Such growth would follow four consecutive quarters of decline.

SUPPORT FOR BELL

The Ontario and Quebec governments both voiced strong objections to Torontobased Unitel Communications Inc.’s bid to end Bell Canada’s domestic long-distance telephone monopoly. In written submissions to the CRTC, the two provinces argued that if Unitel was permitted to charge businesses less for long-distance calls, then local residential rates would likely increase.

LAVALIN'S MOUNTING TROUBLES

Cash-strapped Montreal engineering conglomerate Groupe Lavalin ltée., which has received financial aid from the Quebec government several times in recent years, suffered a setback when a consortium of Canadian and U.S. banks seized control of its oil-refining subsidiary, Kemtec Petrochemical Corp. At week’s end, Quebec Premier Robert Bourassa said that the province is again considering government assistance to ensure that control of the firm remains within Quebec.

ONE AIRLINE?

A senior executive with money-losing Canadian Airlines International Ltd. said that his company would consider merging with its only domestic rival, Air Canada, if continued losses endanger Canadian’s survival. At the same time, federal Transport Minister Jean Corbeil said that Ottawa would drop its long-standing opposition to one airline serving all of Canada if continued competition threatened the survival of Canadian and Air Canada.

VARITY MOVES OUT

Varity Corp., the 144-year-old farmequipment manufacturer formerly named Massey-Ferguson Ltd., is reincorporating in the United States—with the approval of Ottawa and Ontario’s NDP government. Both governments agreed to let Varity shift its head office to Buffalo, N.Y., from Toronto, after the company promised to keep 1,200 jobs in Canada until 1993, and to pay a total of $50 million to the two governments and hundreds of former workers.