The Gazette from Montreal, Quebec, Canada • 23

THE GAZETTE, MONTREAL, FRIDAY, NOVEMBER 1, 1996 3 ees tig changes vor taste Paddington Bear finds new home gord Mcintosh canadian press MARY LAMEY THE GAZETTE The change would mean foreign-owned banks would be able to go after more business because they would have access to the capital of parent institutions. "We will significantly increase the degree of competition in the Canadian banking market," said Michael Kirby, chair of the Senate banking committee. Retreat on near-banks Both committees were asked by the government to review its financial-policy paper released last June. The MPs and senators also urged the government not to go ahead with a proposal to make so-called near-banks or finance companies such as General Motors Acceptance Corp. or Capital One Corp.

a branch of the banking system for the purposes of tighter regulation. The near-banks were able to con vince both committees such amove won't be necessary The finance committee also recommended a consumer-protection bureau be organized to protect bank customers on such things as privacy. And both committees want some changes in the Bank Act to prevent a predatory practice known as tied selling. Both heard complaints from the three investment dealers not owned by banks that loan officers have demanded customers transfer their RRSPs as a condition for loan approvals. The investment dealers could not present convincing evidence that the practice exists.

But the committees decided a preemptive clause should be added to the Bank Act because tied selling is illegal under the Competition Act. "We were not in a position to judge," said Jim Peterson, chairman of the fi nance committee. "We are dealing with the potential." Peterson said the easing of restrictions on foreign banks will make it easier for Canada's own institutions to expand in international markets. In fact, Peterson argued the entire debate over financial services in Canada should shift from the current turf fight over who should do what to how to expand financial services as a major export component Regulatory system The regulatory system also needs an overhaul to get rid of overlapping jurisdictions between the federal and provincial levels. Some financial institutions are regulated by both levels of government.

"We cannot afford the luxury of having squabbles among the various levels of government. We have to get our act together," Peterson said. OTTAWA Foreign banks should have freer rein to operate in Canada, bank customers need a watchdog and governments should stop squabbling over jurisdictional turf in financial services. Those were key recommendations of two parliamentary committees in separate reports yesterday Both the Commons finance committee and the Senate banking committee said Canada should join the rest of the industrialized world in allowing foreign banks to operate without wide restrictions. Currently, foreign banks wanting to compete in Canada must set up subsidiaries with their own smaller capital base instead of operating directly through branches like their domestic counterparts.

CFCF Weatherman dismisses Quebec City 's '42 anglophones 9 Cinar Films has added Paddington Bear and The Wombles to its growing menagerie of children's-television holdings. The Montreal-based company yesterday announced that it has signed an agreement to acquire the FilmFair film library and animation production facilities from Britain's Caspian Group PLC for about $22 million, payable in $3.2 million in cash and 272,500 Cinar subordinate-voting shares. The vendor is a holding company best known in Britain as the owner of the Leeds United Football Club. The deal gives Cinar the rights to 200 half-hour episodes of children's programming based on literary properties, including Roald Dahl's Dirty Beasts and Revolting Rhymes; Michael Bond's Paddington, The Herbs, and Simon in the Land of Chalk Drawings; and Elizabeth Beresford's The Wombles. The company also gains TV, video, music, publishing, licensing and merchandising rights to the titles.

"We have had our eye on this library for quite a while," said Hasanain Pan-ju, Cinar's chief financial officer. Caspian Group "had not been exploiting the titles to the full extent of their potential," Panju said. "They were selling in 20 or 30 countries, whereas Cinar sells its titles in more than 100 countries." The price paid was consistent with the extent to which the films were marketed, Panju said. Cinar has also gained the rights to produce new episodes of all the titles and, with the acquisition of the FilmFair clayma-tion and puppet studio in London, the facilities in which to do the job. "This deal gives us a good foothold in the U.K.

market and a base from which to seek other opportunities in Europe," Panju said. The addition of the FilmFair titles is expected to add $3.5 million to $4 million to Cinar's revenues next year, Panju added. Paddington and friends will increase Cinar's total library to 950 30-minute programs by the end of the year. Caspian Group, involved largely in sports, media and leisure businesses, acquired the FilmFair catalogue in 1991 for about $3.65 million. CONTINUED FROM PAGE CI al, CFCF is "trying to maintain the best value of the company." Several potential buyers for the stations have emerged, including one yesterday Cogeco Cable which lost a hard-fought court battle last spring to buy CFCF's cable assets.

Baton Broadcasting Inc. of Toronto, a partner in the CTV network, BCE WIC Western International Communications and Astral Communications are also thought to be likely bidders. Desmarais repeated a warning that CFCF will be forced to cut local programming and consequently jobs if Global is allowed to broadcast to Montreal via Quebec City "We are not afraid of competition. We compete daily as one of six Montreal stations. We do not believe Global should be allowed in the back door.

If they want to come to Montreal, let them put forward a real proposal for a Montreal station," Desmarais said. He hastened to add that the Montreal market is saturated and cannot support another TV station. Ad revenues in Montreal grew by just 0.2 per cent between 1988 and 1995, while Vancouver had a growth rate of 7.4 per cent, Desmarais said. CFCF estimates that 13.8 per cent of its viewing audience would disappear if Global enters the picture and that it would lose $20 million a year in revenues during the first seven years of Global's operations. He refused to reveal CFCF's broadcast revenues, saying only that $20 million represented "a significant" share of revenues.

CFCF dismissed Global's assertion that it will act as a regional broadcaster, offering news broadcasts and local programming from Quebec City and the Eastern Townships. CFCF weatherman Don McGowan opened the press conference with a dismissive remark about "Quebec City, where 42 anglophones live today" "More than 95 per cent of Quebec's anglophone market is located in Montreal, less than one per cent in Quebec City and 3 per cent in the Townships, Desmarais added. Global responded with a hastily called press conference of its own, held immediately after and just around the corner from CFCF's. Glenn O'Farrell, Global's vice-president for Quebec, responded to what he described as his other broadcaster's "false advertising." Rather than destroying jobs, he said, Global's incursion will create 100 jobs in Quebec, including at least 50 in Montreal. He also challenged Desmarais's assertion that CFCF will lose $20 million a year, offering as evidence the Nesbitt DAVE SI0AWAY, GAZETTE Glenn O'Farrell, CanWest Global's point man in Quebec, told reporters yesterday that CFCF's claims are "false advertising." One local independent producer said his company would welcome Global's arrival on the Quebec scene.

"A third national network is long overdue. CFCF has been generous financially, but we have not been successful in using CFCF as a conduit to get our programs onto CTV With Global, we'll have another window for showing our productions," the source said. Burns report, in which the investment house predicted that the broadcaster's profit before interest, taxes, depreciation and amortization costs (EBITDA) would fall from $15 million a year to $10 million in the first year after CKMI's launch. "In our experience, the shakedown happens and then the dust settles. The fallout would decrease as time went on," O'Farrell said.

Advanced computer skills AR Smalls at is 'VWBug with wings' still lackin in CANADIAN PRESS Volkswagen Bug with wings" and the big American iron to a heavy Chevy Smallsats are "an emerging product" with "huge" potential for direct-TV broadcasters in Europe and Asia, Watson said. Significantly for Canadian service, Watson added, the Borealis concept "doesn't depend on any regulatory interface" between Canada and the U.S. in the controversial area of reciprocity of satellite signals. The latter issue ultimately helped kill a complex deal announced six months ago under which Telesat Canada would buy U.S.-built satellites, place them in Canadian slots and lease back most of their transponders to American broadcasters. That deal offered no role for Spar.

Borealis also features high-speed Internet access, for which developing countries have "enormous demand," Watson said. To kick-star the project, Spar has formed Borealis Space with its head office in Ste. Anne. Borealis would buy and operate the satellites, leasing transponder space to direct-broadcast operators. Ex-pressVu and its rivals have each received Borealis "with polite interest" but "no commitments made," Watson said.

Spar is soliciting venture-capital and service-provider partners for Borealis, and "we'll do whatever is necessary to get it going," Watson said. However, "obviously Spar can't put up $150 million." CONTINUED FROM PAGE C1 heavily publicized deadlines for the start of such service. Michael Neuman, Express Vu's president, this week insisted he has a contingency plan under which Express Vu could begin operating next spring at least 20 months after the company missed its initial target of September 1995. But Canadians haven't waited. Instead, as many of 200,000 Canadian households have flocked to U.S.-based direct-broadcast services, signing up for as many as 150 American direct-broadcast channels featuring crisp video, high-quality sound and almost no Canadian content.

Those 200,000 households have locked themselves into U.S. direct-broadcast technology for the long term, Watson conceded. The initial Canadian smallsat could be in orbit 21 months after Industry Canada gives Borealis a green light, he added. Spar has applied for one of the two orbital slots available to Canada a slot that Watson said could hold at least four small-sats. Each smallsat would weigh 1,700 kilograms, fully fueled and perched in a geosynchronous orbit.

A smallsat would cost $130 million and carry 10 transponders capable of relaying as many as 70 TV channels. By contrast, the big satellites built by Loral Corp. and others weigh 3,000 kilograms in orbit, carry 32 transponders and cost at least $300 million. Watson compared the smallsat to "a group who wrote computer programs was actually quite similar to the proportion among the most highly educated older adults," said Jillian Oderkirk, the report's author. The programs that respondents reported themselves as writing are not necessarily sophisticated.

But Oderkirk said she was struck by the extent to which young people are computer literate and have advanced skills, and the gender equality in the youngest age groups. "I found that quite positive." More than 80 per cent of men and women in the youngest age group said they could use a computer. There was a steady decline with age. Among people 65 and up, 10 per cent said they could use computers. Over all age groups, men were more likely to write programs than women, although women were more likely to use computers at work than men.

More than half of women in the workplace were employed in high-computer-use occupations, compared with 36 per cent of men. In schools, the ratio of students to every available computer varied by province and territory from a low of five students to one computer in the Yukon to a high of 21 students for every computer in Quebec. OTTAWA Canadians are becoming increasingly sophisticated in their use of computers but advanced skills remain the domain of a few. "Over-all, there has been a dramatic improvement in skill levels in recent years," a Statistics Canada report on computer literacy made public yesterday revealed. But among the 56 per cent of adults who described themselves in 1994 as computer users, just over a third used the machines to analyze data and one-sixth employed them to write programs.

Meanwhile, the proportion of users who exclusively used the machines to play high-tech versions of solitaire or to gun down space aliens had dropped to 5 per cent from 16 per cent five years earlier. The study notes that computer literacy is a key to developing a highly educated labor force that can adapt to changing work environments. Not surprisingly, the report notes that young people aged 25 and under have adapted best to the high-tech world. It also shows that in the youngest age group, 15 to 19, both men and women are equally adept at programming skills. "The proportion of young people in that age health-c ifiie overnaui ou are system Economic growth sluggish in August CANADIAN PRESS GILES GHERSON OTTAWA The Canadian economy grew in August, but at an unspectacular rate.

Statistics Canada said yesterday that output of goods and services expanded by 0.2 per cent, about the average monthly pace since January. Increases in the mining, construction and wholesale trade industries helped the economy along, while there was renewed strength in transportation. But expansion in these areas was offset by a decline in manufacturing from July levels. Retail trade and financial services slipped as well. The federal agency said combined with the July increase in production, the first two months of the third quarter of this year were marginally better than the first two quarters.

OTTAWA Forget the myths. Canada's $72-billion health-care system is way overpriced, suffers from appalling management gaps and delivers unspectacular results. And guess what? It could benefit from a fundamental overhaul. That's the conclusion of a Calgary expert, Larry Bryan, who is both a doctor and a former senior health-system executive. The soft-spoken Dr.

Bryan who, until last year, ran Calgary's regional health authority is on a mission to convince Canadians that if they want to rescue their health system the problem isn't a shortage of money (quite the reverse, in fact), but an acute shortage of proper management, oversight and planning. In short: no one's in charge. To make the case, Bryan has published an impressively informative and thought-provoking book that is exactly what its title says it is: A design for the future of health care. It surveys health systems in Canada, the United States, Europe and Japan and proposes a far more cost-conscious and results-oriented system than today's. And instead of today's almost total fixation with curing and healing, Bryan's model would integrate strong doses of public-health promotion and illness prevention.

In place of today's almost complete absence of accountability, Bryan's health care structure would be planned and managed for the needs of defined regional populations. In Bryan's view, our system could probably deliver similar results for 30-per-cent less than the $1,949 per Canadian we now pay annually for health care. After all, he asks and not unreasonably if most industrialized countries have public health-care systems that perform similarly to ours yet cost around 7 per cent of their national GDP, why do we lay out over 10 per cent of our GDP? Granted, a better-managed system would be a more federalism, that no politician dares do other than sentimentalize it at every possible occasion or risk being branded un-Canadian. I admit I exaggerate, but not by much. Certainly the governing Liberals have made it almost impossible to have a serious debate about the crying need to restructure health care by shamelessly politicizing and polarizing the issue.

You're either compassionate and wholly in favor of medicare or a mean-minded bean-counter advocating the destruction of Canadian civilization. It's about that simple With the majority in Ottawa now hostage to this muddle-headed orthodoxy, provincial governments are stuck trying to manage a costly, outdated, seriously disorganized system without treading on the highly explosive political booby trap, which is what the 35-year-old contents of the Canada Health Act have become Even Preston Manning in a pre-election bid to "mainstream" Reform's image has become a victim of health-care soft-headedness. He used to style himself a foe of profligate waste. But now that polls, focus groups and the powerful doctors' lobby tell him how beloved the sprawling health system is among ordinary Canadians, he's ready to toss another $4 billion of federal government money at it, no questions asked. Forget the fact that federal health-care transfers have been "block funded" along with post-secondary education since 1977.

So Manning has no way of being sure that any of his extra $4 billion would find its way to health care rather than roads or welfare. But I digress. The point here is that we need elected officials who will do us all a favor, summon some fortitude and face reality. More on Larry Bryan's sensible proposals next time. S0UTHAM NEWS disciplined one.

Instead of paying doctors a fee for every service they supply the more visits, the more tests, the more operations the higher the income -Bryan favors a pay system that rewards results. He also thinks today's disorganized health system has spawned too many high-cost specialists, too many high-cost hospital beds, too many labs, too many unnecessary operations and rampant overuse of expensive drugs; and all with too little regard for real health outcomes. A key problem, according to Bryan, is that as customers of the health system, Canadians are woefully ill-informed and too ready to presume that "the best" means the most expensive treatment and the latest technology In an election year, this book is a breath of fresh air. These days, whenever the discussion turns to reining in Canada's shambling, bloated health-care monster, federal politicians of all stripes instinctively know what to do duck. They quake in their pants, as the PM likes to say, then take refuge in syrupy platitudes.

Unfortunately, we've turned our health-care system into such an icon of patriotism, a crown jewel of IMMIGRATION SERVICES An Alternative to high legal fees Green Cards Visas Work Permits Vicon Int'l Consulting Services 1-561-338-5553 (outside US) 1-800-984-2660 (within US).