PRESS DIGEST - Canada - July 2

July 2 (Reuters) - The following are top stories from selected Canadian newspapers. Reuters has not verified these stories and does not vouch for their accuracy.

THE GLOBE AND MAIL - All across western Saskatchewan and southern Alberta, farmers are scanning crop-insurance policies and calculating how short they'll be on payments this year as one of the worst droughts on record parches their land and their bank accounts.

- Air Canada mechanics and technical staff, worried about losing their jobs to El Salvador, narrowly voted down a tentative 21-month labour pact that had been recommended by union negotiators, throwing the cash-strapped carrier's recovery strategy into jeopardy.

The surprise rejection of the labour pact thwarts Air Canada's plans to ask Ottawa for pension relief and blocks $600-million in loans required to avoid a filing for bankruptcy protection for the second time in six years.

Report on Business Section:

- Opel frontunner Magna's (MGa.TO) consortium partner Sberbank said the race to acquire the carmaker was all but over, though Beijing Automotive Industry Holding Co (BAIC) may still lodge a bid in the coming days.

- A group of former Coalcorp Mining Inc (CCJ.TO) executives have filed suit against Pala Investments Holdings Ltd, the resource fund masterminded by Russian billionaire Vladimir Iorich, alleging that Pala illegally gained control of the coal producer and is now driving the miner toward financial ruin so it can buy the rest of the coal producer on the cheap.

NATIONAL POST

- President Barack Obama on Wednesday blasted health care reform opponents for citing faults in Canada's medicare system as a tactic to "scare" Americans away from embracing his plan to create a publicly run health insurance program in the United States.

- It's time for the United Nations to significantly step up its effort in Afghanistan beyond the capital, Foreign Affairs Minister Lawrence Cannon is expected to tell the organization's Security Council on Tuesday.

Financial Post section:

- General Motors Corp. GMGMQ.PK will build a new luxury stretch sedan called the Cadillac XTS at its assembly plant in Oshawa, Ont., according to suppliers briefed on the automaker's latest product plans.