The United States and Canada should gradually dismantle their trade barriers, according to a report by the MacDonald Royal Commission on the Economy. The report, which was released in Ottawa Thursday, also recommends sweeping changes in Canada's social welfare system, including getting able-bodied workers off an unemployment insurance plan that is too easy to abuse. Other recommendations:
Replace welfare and public-housing subsidies with a guaranteed annual income of $10,000 (US) for a family of four. This would raise the standard of living of poor people by 30 percent.
Replace family allowance checks -- the more children, the bigger the checks -- and old-age security payments with guaranteed annual income.
Switch to an elected Senate that provides regional representation. The Senate is now an appointed body, modeled after the British House of Lords.
Many of the recommendations are music to the ears of Prime Minister Brian Mulroney, especially because they come from a commission that was appointed by former Liberal Prime Minister Pierre Trudeau. Donald MacDonald, chairman of the commission, was finance minister under Mr. Trudeau.
Mr. Mulroney favors free trade. Trade unions and Canadian economic nationalists in the Liberal and New Democratic Parties do not. The commission's recommendations may give Mulroney the ammunition he needs to negotiate a free-trade pact with the US. Canada and the US are the world's two biggest trading partners. Under the plan, the dismantling of tariffs would start in 1987 and be phased in over 10 years.
The area of social benefits is a political mine field. The Mulroney government would like to stop paying ``baby bonuses'' and old-age pensions to middle-class people who do not need the money. Earlier this year, the Conservative finance minister tried to reduce the amount by which old-age pensions were indexed to inflation. There was such an outcry that Mulroney backed down.
Bombs hit four firms in Paris doing South African business
Bombs exploded yesterday at four businesses apparently targeted for doing business with South Africa, police said. Three people were slightly injured. An anonymous caller to the French news agency Agence France Presse claimed responsibility for the attacks in behalf of leftist terror group Direct Action, saying the companies oppress blacks by operating in South Africa.
Afghan guerrillas launch countermove in key province
Afghan guerrillas said yesterday they had launched a counteroffensive against a Soviet thrust in Afghanistan's southeastern province of Paktia as wounded rebels continued to pour into Pakistan. A guerrilla leader said Soviet troops had been pushed back in some areas of Paktia, where they began a major bid last month to seal off guerrilla supply routes from Pakistan.
Five thousand veteran Mujahideen (Islamic warriors) had been thrown into the counteroffensive launched Sunday, Hezb-e-Islami guerrilla leader Gulbuddin Hekmatyar said yesterday on his return from the battle zone.
Iran-Iraq war heats up over Kharg oil hub
Iraqi warplanes dropped more than four tons of explosives in a raid on Kharg Island yesterdaythu and shot down an Iranian jet in a dogfight over Iran's main oil terminal, the Baghdad command said. There was no immediate comment from Iran, which Wednesday night intercepted a 24,000-ton container ship near the Strait of Hormuz and diverted it for inspection, saying it carried cargo for Iraq, Iran's enemy in the five-year-old Gulf war.
Sakharov and his wife gone from home, dissident says
Soviet dissident Andrei Sakharov and his wife have disappeared from their home in exile in the Soviet city of Gorky, a fellow dissident said yesterday. Lev Kopelev, who has lived in West Germany since Moscow withdrew his Soviet citizenship in 1981, said the Nobel Prize-winning physicist and his wife, Yelena Bonner, had not been seen in Gorky for more than three weeks and their house was dark and deserted.
He said his information came from very reliable sources, but would not elaborate. He also said a Soviet guard who usually stood across the street from the Sakharovs' house was no longer at his post.
Main opposition party gets new leader in Australia
Deputy leader John Howard replaced Andrew Peacock yesterday as head of the Liberal Party, the main parliamentary opposition to the Australian Labor Party of Prime Minster Bob Hawke. Mr. Howard was treasurer in Malcolm Fraser's government, which was defeated by Mr. Hawke in 1981.
Nixon met warmly by Chinese leader
Chinese Communist Party leader Hu Yaobang warmly greeted Richard Nixon yesterday and said he had read several books written by the former President, the New China News Agency said. ``You are really a good statesman. You are still bouncing,'' the official agency quoted Mr. Nixon as telling Mr. Hu during a meeting at Communist Party headquarters.
US says Saudis pledge bases to thwart some Soviet action
The State Department has told Congress that US forces can count on use of Saudi Arabia's bases should there be Soviet military action in the Persian Gulf or threats to oil supplies there, a US official said. The Saudis offered use of the bases in a message relayed to the House Foreign Affairs Committee by William Schneider Jr., undersecretary for security assistance, the official said Wednesday.
The Reagan administration is in the process of deciding on a new arms package for the Saudis, with a fight expected in Congress. An arms deal for Jordan is also in the works.
Ohio congressman to run for Senate against Glenn
Rep. Thomas N. Kindness (R) of Ohio has decided to run against Sen. John Glenn (D) of Ohio for a seat in the US Senate., aides to Mr. Kindness said Thursday. The congressman intends to announce his candidacy next Wednesday, said John Sparkman, Kindness's administrative assistant.
Kindness, former mayor of Hamilton, Ohio, is a fifth-term congressman. He is on the House Judiciary Committee.
US delivers 12 more copters to forces in El Salvador
The Reagan administration, as part of a continuing buildup of El Salvador's Air Force, has delivered 12 more helicopter gunships to the Central American country over the past two weeks, officials said Thursday. The copters were drawn from US National Guard inventories, Lt. Col. Don Brownlee, a Pentagon spokesman, said.
The new helicopters will increase El Salvador's copter force to more than 60 at a time when the country's Air Force has already dramatically expanded its role in the fight against leftist rebel forces.
CorrectionCorrection for 9/4/85
The Monitor in its Sept. 4 issue reported incorrectly that no Democratic woman had been elected to the United States Senate. Hattie W. Caraway of Arkansas was appointed to fill her husband's unfinished term and elected to a full term in 1931. Maurine B. Neuberger of Oregon, also the widow of a senator, was elected in 1960. The Democrats have no women serving now in the Senate.