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Holiday finds union shaky

As Canadians gathered Saturday to celebrate Canada Day _ the country's 128th birthday _ there was concern over the fate of the union.

Prime Minister Jean Chretien said he's "not too nervous" about the vote due this fall in Quebec on whether the mainly French-speaking province should separate from English Canada.

He has assured Canadians that Quebeckers _ he is one himself _ will reject any suggestion of independence.

There is, however, increased momentum by separatists calling themselves "sovereignists," who advocate a political and economic union with Canada after independence.

Quebec Premier Jacques Parizeau, with support from federal Bloc Quebec leader Lucien Bouchard, proposes an independence vote that would suggest both sovereignty and a new political and economic deal with Canada.

Chretien has formed a federalist team headed by Quebec Liberal leader Daniel Johnson and federal Conservative leader Jean Charest. The federalist forces seeking to keep Canada united are "well equipped" to present the case successfully to keep Quebec within Canada, Chretien said.

Canada Day, meanwhile, was celebrated across the country with outdoor festivals, picnics, celebrations and fireworks. The largest celebration was in Ottawa, the nation's capital, with hundreds of thousands of people gathering on Parliament Hill for Canada's "first of July" party.

More cuts in store for social programs

It will be the same old song as the federal Liberal government passes the midpoint of its four-year mandate.

The agenda will include further deficit reduction, social program cuts and government restructuring, Prime Minister Chretien said.

"We have an agenda that will continue . . . we're happy with the work done," Chretien said after a two-day Cabinet meeting to review progress and plan for the fall session of Parliament.

Plans call for legislation to cut unemployment insurance benefits, and proposals to reform old-age pensions so that seniors with family incomes exceeding $100,000 (Canadian) would be cut off.

Toronto may allow prostitution

In what is known as "Toronto the good," the city council is seeking to license prostitutes.

The council voted 10-7 to tell Justice Minister Allan Rock it wants adult prostitution decriminalized, but only after the city has had a chance to put a licensing and regulatory control plan into place.

"What we have done is sent a message that the status quo is not working," said Mayor Barbara Hall. "We want something that will control this problem."

Facts and figures

Canada Trust trimmed its prime lending rate by one-half point, to 8.25 percent, as the key Bank of Canada rate dropped 0.02 points to 6.97 percent.

The Canadian dollar advanced to 72.86 U.S. cents while a U.S. dollar was $1.3725 Canadian (excluding bank exchange fees).

Stock markets were mixed; Toronto's composite index closed Friday at 4,527 points.

Lotto 6-49: (Wednesday) 3, 30, 31, 33, 34 and 41; bonus 1. (June 24) 4, 13, 15, 19, 30 and 46; bonus 43.

In brief

The Ontario sales tax and federal Goods and Services Tax will be combined, as in Quebec, into a new integrated tax of 15 percent. Ontario's new Premier Mike Harris combined the taxes to cut the costs and bureaucracy of collecting two separate taxes on essentially the same goods.

Crews battling forest fires in Northern Ontario and Manitoba aren't out of the woods yet. Cooler weather and rain provided a welcome break, but there are still several hundred fires burning. In Manitoba, three firefighters were killed when a helicopter crashed into the Churchill River near the mining town of Leaf Rapids.

The cost of mailing a letter in Canada will rise two cents Aug. 1 to 45 cents; the cost of mailing letters to the United States will go up to 52 cents, and letters abroad to 90 cents. This will be the last until at least 1997.