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Page THE HERALD OUTLOOK Saturday Jury 1M the HERALD Outlook Big business cant always guarantee profit OUTLOOK is published each Saturday by the IMIIS Home Newspaper of Halton Hills A Division of Canadian Newspapers Company Limited at Guelph Street Georgetown Ontario 17G Second Class Mail Registered Number STAFF WRITERS Donna Kell David A Beattie In the heady days of the early 1980s Bell Canada decided it wanted to be more- than just a telephone company Ma Bell shed her skirts to become another great Canadian conglomerate in the style of Canadian Pacific BCE as it is called expanded quickly in many different direc tions In 1985 it took advantage of Jack Pooles misfortunes in the Western Canadian real estate market buying Daon Develop ment the company Mr Poole founded It named its new real estate division BCE Developments In BCE Developments took advantage of the misfortunes of another real estate developer Ox ford Developments of Toronto BCE snapped up billion worth of Oxfords office and commercial buildings for a song Now in the sober days of the late 1980s it looks like the only people who wilt benefit from Bells dalliance with real estate are the Reichmann brothers and their company Olympia and York shareholders have been the losers On Tuesday BCE said it was get ting out of the real estate business selling its development arm to Olympia and York for million If the deal goes through it will be a good one for Olympia and York The you may remember pulled out of an earlier deal to buy per cent of BCE Developments for million No one knows why but rumor has it that the family was not com fortable with a minority position BCE Developments would still run the show And lets face it the companys track record has not been good Snapping up the whole company for roughly half a billion dollars is a much better deal for 0 and Y BCE Developments shareholders have not fared as well They will get a share compared to a market price of before trading was halted The earlier offer was worth a snare but only for port of the outstanding shares Most shareholders no doubt will be satisfied to take their money and run Under BCE the outlook for the subsidiarys stock price was gloomy For months now the company has had its entire port folio of US commercial buildings up for sale Apparently whatever bids it received were disappoin ting With interest rates rising and property markets slumping just decided to throw in the towel says Ross Cowan an analyst with Levesque Geof f rion Inc BCE GAVE UP Perhaps the biggest problem the company faced was bringing to completion buildings still under construction or yet to be leased Carrying properties in a stow market is expensive so the owner must be patient and have deep pockets In this respect the are eminently qualified Among the office buildings under construction are the giant BCE Place in downtown Toronto and buildings in Montreal Vancouver Minneapolis St Paul Chicago and Santa Ana Calif Disappointed as they may be shareholders of BCE Developments have learned a valuable lesson Just because a development company is backed by a big cashrich conglomerate does not mean it will necessarily prosper The cycles that grip the commer cial real estate industry have swept away more than one vi- sionary tike Jack Poole When their companies sell shares to the public investors can get swept away too Berrys World 77is China everybodys talking about where Is it EDITOR Brian MacLeod AD MANAGER Dan Taylor ACCOUNTING June Joan Manual C1AS8IKIE1 Tallinn Sail SNAFU by Bruce Beattie ADVERTISING SAIKfi Valpis Craig Teeler Stacie Roberts PRODUCTION DEPARTMENT Dave Hastings Wilson CIRCULATION DEPARTMENT Marie Shadboll PRESSROOM FOREMAN Brian PRESS ASSISTANT Todd Canada can benefit from expanding trade Ottawa This time try not to put it where Ill get a ticket Few voters elected Tories for integrity Ottawa Stewart MacLeod Thomson Hows When Prime Minister Brian Mulroney says his governments election victory last November was effectively a confidence for the freetrade agreement you have to concede that the guy has a point Free trade was after all the centrepiece of the Tory campaign strategy And while the Liberals and NDP opposition parties which opposed the deal attracted more total votes it was the Tories who won the election When the prime minister says the election victory was in effect an endorsement of the Meech Lake accord you cant really dismiss that argument out of hand Mr Mulroney and his fellow Tory can didates talked a lot about Meech Lake during the campaign and it might well have influenced some voters Frankly I havent met any but then there are many people I havent met This brings us to the latest prime ministerial claim When Mr says with an absolutely straight face that Canadians re elected his government because of its integrity its time to plead for a halt The Tory government was un doubtedly reelected for many reasons One could probably go all the way from free trade to the table manners of local candidates with acid rain and oyster regula tions thrown in for good measure But I have a distinct feeling that very few Canadian voters cast their ballots while preoccupied with the governments Integrity Actually the timing of Mr comment was a dead giveaway He made the claim as the Royal Canadian Mounted Police were starting an investiga tion into the activities of two more Quebec Tory MPs ANOTHER EXAMPLE Similarly the prime minister credited Lake for his elec tion victory just as the western premiers were meeting in Camrose and watering down their support for the accord As Deborah Grey the only MP from the Reform Party of Canada was teeing off on the prime minister for not displaying greater flexibility on the accord Mr Mulroney rose to say that the elec tion of 25 Tories in Alberta last November represented a major endorsement of Meech Lake What he didnt mention of course was that after one of the 25 successful Tories died Ms Grey won a subsequent votes During the campaign in Alberta the prime minister told listeners that a vote for the Tories was a vote for free trade Admittedly it isnt easy to figure out why some people vote the way they do but considering the scan dals and other personnel problems that plagued the government dur ing Its first mandate I think we can pretty well eliminate integrity as a positive factor There were you might recall a number of cabinet resignations in volving such questionable ac tivities as conflict of interest and other wrongdoings The most pro minent one was Sinclair Stevens but the greatest concentration was clearly within the Quebec caucus Since the election weve had Tory MP Richard Grlse plead guil ty to fraud charges He resigned after spending four hours in jail A few months ago Montreal MP Michel Gravel was given a one- year suspended sentence after he pleaded guilty to counts of bribery and fraud After serving less than two months in jail he now is in a halfway house Just a few days ago three new charges were laid against a former MP who did not run last November The new charges of corruption breach of trust and theft were added to five charges laid earlier Vic Parsons With the equivalent of a Mexico being added to the worlds popula tion each year Canadian farmers can reap enormous benefits from expanding agricultural trade But to take advantage of new markets suggests Gilson an agricultural economist farmers are going to have to make ad justments they might find hard to swallow That may include giving up supports and subsidies that have become part of the agricultural scene Gilsons conclusions are contain ed in World Agricultural Changes Implications for Canada a recent report prepared for the CD Howe Institute a private research agen cy The University of Manitoba pro fessor zeroes in on the potential for growth Between and 2000 he says the worlds population will grow by 86 million annually to hit about six billion by the turn of the century An estimated 78 per cent of this population growth is expected to be in developing countries where about 700 million people suffer from chronic malnutrition Even if these millions add only per cent to their daily caloric intake it will mean a sharp increase in food con sumption As this growth occurs Gilson says demand for cereals wilt rise by million tonnes a year Thats almost equal to Canadas total grain exports in the crop year As a major grainexporter Canada would be particularly well placed to take advantage of this ex panding market DIVERSITY POSITIVE If Canadian farmers are able to diversity their grain sales it cant be anything but positive In the 196708 crop year the Soviet Union and China took 515 per cent of Canadas wheat exports But wheat production in the Soviet Union is unpredictable Gilson says the probability is high that the Soviets will continue to be major grain importers through the 1990s but others suggest Canadas largest wheat client could become a net exporter during the decade China says will probably remain a major Importer or grain and oilseeds products until 2000 In spite of significant production in creases in recent years Add the expanding demand in the developing world to traditional markets and there is a good op portunity for Canadian farmers to sell more abroad A fly in the ointment however is the agricultural subsidy war notably between the United States and the European Community that is plaguing the world One cannot be sanguine about the prospects for major liberaliza tion of global agricultural policies in he near future Gilson says gloomily Past experience shows change is difficult to achieve when producers in the developed world would be the main losers with liberalization But times are changing The reality of a more open world market and the burgeoning trade opportunities may dictate that changes be made-