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Canadian Auto Workers union agrees to wage cuts that help GM

The Canadian Auto Workers union has agreed to wage concessions that were said to be crucial to General Motors remaining in Canada.

As well, the deal stipulates that GM's Ontario car assembly and parts plants in Oshawa, St. Catharines and Woodstock will stay open.

Though the workers earlier agreed to concessions and a three-year wage freeze, the Canadian government said it wasn't enough for it to provide a financial bailout.

Union leader Ken Lewenza said the new deal cuts $13.35 to $14.25 (U.S.) from the average hourly wage of Canadian workers on top of a previously negotiated $6.25 cut.

It also "secured" pension benefits, which are about $6.25 billion in the red, with an agreement to restructure the retirement plan, he added.

GM workers in Canada and the United States have agreed to concessions as the company struggles to restructure and avoid bankruptcy.

The company has closed its pickup truck plant in Oshawa, Ontario, with the loss of 2,600 jobs, and will shut a transmission plant in Windsor, Ontario, employing 1,400, next year. As well, GM will close 245 of its 709 Canadian dealerships next year.

Mulroney legal bill costly to taxpayers

Canadian taxpayers will pay the $1.78 million (U.S.) legal bill for former Prime Minister Brian Mulroney in the inquiry into his financial dealings with a foreign lobbyist.

It was also learned that the Oliphant Commission's investigation of Mulroney receiving cash-filled envelopes from businessman Karlheinz Schreiber will cost $12.5 million, also being paid by the government.

Mulroney acknowledged accepting $200,000 (U.S.) in cash from Schreiber shortly after he retired from politics in 1993. He said there was nothing improper and it was for his aid in promoting a plant in Canada to build German-designed light armored vehicles.

In 1996, the federal government paid Mulroney $2.1 million in a libel settlement to cover his legal fees over allegations he had taken kickbacks in the 1988 sale of Airbus planes to Air Canada.

News in brief

• A man and a woman have been arrested in the abduction and murder of Victoria "Tori" Stafford, 8, of Woodstock, Ontario. Her body hasn't been found. Michael Rafferty, 28, was charged with murder and abduction, and Terri-Lynne McClintic, 18, was charged with abduction and being an accessory to murder. McClintic has been assisting police in trying to find the body of Stafford, who disappeared April 8.

• Canadians will get assistance handling credit card debt. Finance Minister Jim Flaherty announced new rules for banks and credit card issuers requiring clearer information and a minimum 21-day interest-free period on new purchases. There was no move to limit interest rates as Flaherty said there are adequate choices available.

Facts and figures

Higher commodity prices and a weakened U.S. dollar pushed Canada's currency to 89.04 cents U.S. Friday. The U.S. greenback returned $1.1232 Canadian, before bank exchange fees.

Canada's retail sales increased for the third month in March, up 0.3 percent, largely due to higher new car sales.

It will be at least four years before home construction returns to the boom-times level earlier this decade, says Canada Mortgage and Housing Corp.

The Bank of Canada key interest rate remains at 0.25 percent and the prime lending rate is 2.25 percent.

Stock markets advanced, with Toronto's composite index at 10,056 points Friday and the TSX Venture index at 1,091 points.

Lotto 6-49: (Wednesday) 4, 22, 26, 29, 39 and 48; bonus 31. (May 16) 16, 17, 23, 27, 30 and 45; bonus 39. Super 7: (May 15) 3, 4, 7, 16, 19, 26 and 45; bonus 35.

Regional briefs

• Thirteen workers at ATB Financial in Edmonton are splitting Canada's second-largest lottery jackpot of $44.5 million (U.S.). The group in the bank's human resources department each received $3.42 million in tax-free cash from Wednesday's Lotto 6-49 draw. The biggest jackpot of $48.3 million was also won in Alberta, in 2005 by 17 workers at a gas plant near Edmonton.

• Police said someone was seen running from a downtown building before an early-morning fire destroyed two St. James businesses and damaged five others. Damage was $3 million. The fire was set at Double Dragon Kickboxing and spread to an antique shop and other businesses.

• A tentative deal has averted a strike by nurses in Newfoundland and Labrador. The nurses had rejected the provincial government's "final" offer that Premier Danny Williams said would have raised their salaries by up to 30 percent over four years.

Jim Fox can be reached at canadareport@hotmail.com.

Canadian Auto Workers union agrees to wage cuts that help GM 05/23/09 [Last modified: Saturday, May 23, 2009 8:06pm]

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