Canada report

Big pay raise for Parliament? The prime minister says no

Canada's federal politicians won't be getting the 10 percent pay raise they expected as they head back to work.

Prime Minister Paul Martin has killed the proposed salary increase, and in doing so rejected a legislated system that was supposed to take the politics out of parliamentary pay.

The increase would have pushed the base pay of a member of Parliament up $14,000 to $155,000.

"The increases in MPs' salaries will reflect essentially the increases received by the average Canadian," Martin said, but the government hasn't yet decided how this will be determined.

Members of Martin's Cabinet agreed with the action as the government faces pay demands from 40,000 federal workers who were offered 2 percent more this year.

John Williamson of the Canadian Taxpayers Federation called decision "a very good step."

The term of Governor General Adrienne Clarkson, the queen's official representative in Canada, will continue for an additional year.

Prime Minister Paul Martin extended the four-year term of the former broadcaster in the largely ceremonial appointed position.

Her vice-regal role, however, could be called upon due to the current minority Liberal government.

Should the Liberals be defeated on a vote of confidence in the Commons, it would be up to Clarkson to rule whether there should be a general election, or whether Conservative Opposition leader Stephen Harper should be given a chance to form a government.

The first test for Martin will come as Parliament resumes sittings in the coming week and the Liberals outline their legislative agenda.

One of Canada's largest banks predicts that robust oil supplies will result in sharply lower prices for crude and gasoline over the next two years. Bank of Montreal Financial Group says that could mean a drop of 15 cents a liter (57 cents a U.S. gallon) for gasoline by next summer. World oil prices should fall from current record-high levels around $50 (U.S.) a barrel to the $33 to $38 range in 2005 and even lower in 2006, the report said.

There was sadness in the Merck Frosst Canada laboratory in Montreal, where researchers made a pharmaceutical discovery nearly 20 years ago that changed the treatment of arthritis. The company ordered a global recall of Vioxx after a study pointed to increased risk of heart attacks and stroke from using the popular drug.

The Ontario government is downsizing. Finance Minister Greg Sorbara said Ontario will have a smaller government and fewer employees, aiming toward a balanced budget in four years. He didn't indicate what programs might be cut back or eliminated as the Liberals look for ways to fund their campaign promises.

Canada's dollar has soared to an 11-year high, spiked partly due to higher oil prices as the country exports oil largely from Alberta.

The dollar was 79.19 U.S. cents Friday, while the U.S. dollar returns $1.2627 Canadian, before bank exchange fees.

There's no change in the key Bank of Canada interest rate of 2.25 percent or the prime-lending rate of 4 percent.

Stock markets are higher, with the Toronto exchange index at 8,727 points and the Canadian Venture Exchange at 1,632 points.

Lotto 6-49: (Wednesday) 10, 12, 14, 27, 34 and 36; bonus 26. (Sept. 25) 15, 17, 20, 21, 44 and 47; bonus 26.

Jim Fox can be reached at 519 888-4444 or canadareport@hotmail.com

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