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U.S. economic problems could prompt more income tax cuts

The Canadian government says it will consider further income tax cuts if they are needed to protect the country from an economic slowdown.

Finance Minister Paul Martin said that while Canada will be affected somewhat by the U.S. economic slowdown, federal policies have ensured it won't escalate into recession.

"Given the integration of our two economies, we're not immune," he said, noting the slowdown in the auto industry and telecommunications companies in Southern Ontario.

Canada remains well positioned, Martin said, due to budget surpluses, declining debt, rising disposable incomes, low inflation and growing productivity.

The tax cuts contained in the last budget are only now starting to take effect and "there are further cuts to come," Martin said.

No new budget is planned until next year but "we'll do an economic update probably in the middle to late spring," he added.

Economists predict the federal Bank of Canada will move to cut its key interest rate further from the current 5.25 percent to stimulate the economy.

Airports disinfect shoes

Travelers arriving at Canada's international airports are being required to walk across disinfectant carpets as a precaution against foot-and-mouth disease.

As well, canine units have been assigned to patrol baggage carousels when flights arrive from Britain looking for undeclared meat that could be harboring the virus.

The carpets were installed in airport hallways leading to Customs checkpoints and officers are giving extra attention to travelers from the United Kingdom.

The export of meat products from Britain was banned as soon as the outbreak began.

In brief

Prime Minister Jean Chretien has appointed a former Liberal politician from Prince Edward Island, a medical researcher from Quebec and a farm activist from Ontario to the Senate. They are Elizabeth (Libbe) Hubley, 58; Dr. Yves Morin, 71; and Jim Tunney, 73. Retirement age for senators is 75.

It's a new game for Toronto-based Irwin Toy Co. Canada's best-known game and toy maker was sold for $55-million to a private group, Livgroup Investments. It marks the end of a 75-year-old family dynasty whose major shareholders are Arnold and Macdonald Irwin. The new owners are paying $6.25 a share.

Facts and figures

Canada's dollar is down to a 2{-year low at 64.09 cents U.S. while the U.S dollar returns $1.5603 in Canadian funds before bank exchange fees.

The Bank of Canada's key interest rate remains 5.25 percent while the prime lending rate is 6.75 percent.

Stock exchanges were lower, with the Toronto 300 Index at 7,823 points while the Canadian Venture Exchange index was 3,052 points.

Lotto 6-49: (Wednesday) 6, 20, 31, 36, 38 and 44; bonus 4. (March 10) 5, 7, 8, 12, 23 and 28; bonus 39.

Regional briefs

The Sierra Club warns that Canada's West Coast ground fish stocks are declining, which is what has been happening on the East Coast. The conservationist group urged the federal government to provide more funds for scientific research of about 100 species of bottom-dwellers such as hake, halibut, Pacific cod and rockfish.

New Brunswick Liberal leader Camille Theriault, 46, is considering whether to remain in politics. The former premier said he is contemplating life outside politics after being released from a week in a hospital for treatment of chest pains traced to a digestive problem.

British Columbia Highways Minister Helmut Giesbrecht wants the federal government to start fixing up the Trans-Canada Highway. Improving the deteriorating roadway would help ease western Canada's alienation, he suggested. Rebuilding Cache Creek to the Alberta border section of the highway would cost $2-billion, he said.

An Edmonton soldier is under arrest after a vehicle slammed through the front doors of the headquarters at the city's military base about 4 a.m. Thursday.

_ Information from the Toronto Globe and Mail was used in this report.