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Federal government considers cut in taxes

Pressure to ease the national tax burden heightens in the wake of moves on the provincial government level.

Income tax cuts of up to 25 percent over five years are being considered by the Canadian government, which is under pressure to ease tax burdens.

Finance Minister Paul Martin is considering a plan to roll taxes back by an average of 20 percent, with an additional 5 percent for middle-income earners with children.

Provincial governments have already slashed income tax rates as their economies have improved.

Taxes in Canada, one of the highest-taxed nations, are often attributed to generous social services and no-charge medical care.

Word that the federal government was going to make major moves on tax reform came Friday, just days before a meeting of provincial premiers.

Ontario Premier Mike Harris, whose Conservative government has cut provincial income taxes by 30 percent in the past four years, is heading an effort to persuade the federal government to cut taxes. The issue is at the top of the agenda for this week's conference.

Prime Minister Jean Chretien had been concentrating on reducing the deficit and previously said any surpluses would be split between social programs and tax cuts.

Toronto Dominion Bank

buys Canada Trust

Toronto Dominion Bank is paying $8-billion to take over Canada Trust with the expected loss of almost 5,000 jobs.

The takeover next year will result in TD becoming Canada's third-largest bank with 43,400 workers, 1,608 branches and 10-million customers.

TD president Charles Baillie said 275 branches will be closed and 4,900 jobs cut, 2,000 through attrition over three years.

Canada Trust was offered for sale by parent company Imasco Ltd. of Montreal, which also owns Imperial Tobacco and Shoppers Drug Mart.

In a related deal, British-American Tobacco Co. has bid $10.9-billion to take over Imasco but doesn't want Canada Trust or Shoppers. BAT currently owns 42 percent of Imasco.

In brief

+ Prime Minister Chretien shuffled his Cabinet Tuesday, adding five new faces but leaving the big jobs unchanged. Joining the Cabinet will be members of Parliament George Baker, Elinor Caplan, Denis Coderre, Maria Minna and Robert Nault. Dropped from Cabinet portfolios were Sergio Marchi, Diane Marleau, Marcel Masse, Fred Mifflin and Christine Stewart.

+ Newspaper mogul Conrad Black is suing Chretien for abuse of power for blocking his appointment to Britain's House of Lords. Black says the Canadian government has no right to advise Queen Elizabeth II against conferring honors. Chretien has said Canadian citizens cannot accept titles granted by foreign countries. Black is publisher of Canada's National Post and Britain's Daily Telegraph.

+ One in four jobs created in Canada in the next two years will be in Toronto, TD Bank predicts. Next in line for most jobs will be Calgary, Montreal and Vancouver, bank economists said. With a booming manufacturing sector, Toronto will add 95,000 jobs this year and 50,000 in 2000.

Facts & figures

Canada's dollar climbed to 67.3 cents U.S. at midweek but fell to 66.51 cents U.S. Friday. The U.S. dollar was $1.5035 Canadian before exchange fees.

The Bank of Canada key interest rate is 4.75 percent. The prime lending rate is 6.25 percent.

Inflation fears pushed stocks lower Friday. The Toronto Stock Exchange 300 Index was at 6,879 points. Montreal was at 3,723 points, Alberta 2,572 points and Vancouver 405 points.

Lotto 6-49: (Wednesday) 4, 11, 19, 21, 23 and 40; bonus 44. (July 31) 5, 14, 26, 31, 38 and 48; bonus 6.

Regional briefs

+ Yvonne Gilmour of Saskatoon believes a family of eight is enough after giving birth to quintuplets last week. Aided by seven doctors and six nurses at Royal University Hospital, the three girls and two boys were delivered by Caesarean section 29 weeks into the pregnancy and ranged between 1 pound 7 ounces and 2 pounds 2 ounces. Gilmour and her husband, who have a 3-year-old daughter, have bought a van.

+ A memorial service was held last week in Winnipeg for Manitoba ombudsman George Maltby, who died at age 84. He was appointed to the public service position to investigate complaints against the provincial government in 1970 after a police career in England. He retired in 1982.

+ Negotiations to end controversial tolls on a new four-lane highway in New Brunswick began Thursday between the provincial government and Maritime Road Development Corp. The new Conservative government is seeking to remove tolls approved by the previous government.