Federal government has tools to solve manufacturing crisis

By Wayne Gates

January 30, 2008

Canada's manufacturing sector is in a state of crisis. Over the past five years, the Canadian economy has lost more than 350,000 manufacturing jobs as a result of plant closures and permanent layoffs in communities from coast to coast to coast.

At the local level, the St. Catharines-Niagara area has been among the hardest hit.

Since the Canadian dollar began its meteoric rise in 2002, we have seen almost 5,000 jobs lost in workplaces like General Motors, Affinia and Edscha. To put it in relative terms, in 1980 manufacturing accounted for one of every four jobs in our area - today it accounts for one of seven.

Hardly a week goes by without another devastating blow to our region's manufacturing sector. Most recently, it was announced the CanGro operation in St. Davids will be closing if a buyer can't be found. This would affect not only hundreds of employees, but also a large number of fruit growers who depend on this company as suppliers. One wonders if and when it will ever end.

Manufacturing job losses impact workers directly, but they also have a devastating effect on families and the community as a whole. Over the course of our union's "Manufacturing Matters" campaign, we heard many troubling stories at our community forums.

Food banks are struggling to meet demand; local charities and other social service organizations are experiencing a dramatic drop in donations; municipal governments are witnessing a decline in tax revenue from both the workers who are losing their jobs and the businesses that are shutting their doors and businesses are suffering from declining sales as families cope with job losses or face chronic job insecurity.

What has caused our manufacturing sector's woes?

To start with, the Canadian dollar has risen 50 per cent in value since 2002. That means our goods are now more expensive to sell on the global market, a devastating blow to a country so dependent upon the export market.

In 1996, Canada enjoyed a $12 billion trade surplus - we exported more goods than we brought in. Just 10 years later, in 2006, we recorded our worst trade deficit of $28 billion.

Why has this happened? In pursuit of free trade, the federal government neglected to ensure the trade agreements are fair.

We have given access to our economy to other countries without the same benefits being accorded to Canadian companies.

And instead of trying to rectify this situation, the federal government continues to pursue these agreements, most recently with South Korea. Recent studies suggest we would lose an addition 33,000 manufacturing jobs should this deal be signed.

It is clear that when push comes to shove, the federal government will not do what it takes to help protect Canadian workers. So far, their approach to this crisis has centred exclusively on misguided corporate tax cuts and token investment initiatives.

The promised $1-billion Community Development Trust Fund, announced last week by the federal government, would only be implemented if the spring budged is passed. It's time our prime minister stopped playing partisan politics at the expense of workers.

So, what can be done? Here are a few suggestions:

• Intervene to bring the value of our dollar back to sustainable levels by encouraging the Bank of Canada to cut interest rates further.

• Use public funds to purchase goods made in Canada by enacting a "Buy Canadian" policy for public procurement. This should apply for all levels of government.

• Create a federal parliamentary task force on manufacturing job loss.

• Make significant direct investments in key manufacturing industries and sites to rebuild communities struggling with manufacturing job losses.

• Develop tighter controls for the purchase of Canadian companies by foreign investors.

• Create a new AutoPact to ensure foreign imports are tied directly to investment and jobs in Canada.

• Develop a "Green Car" strategy to support and promote the development of fuel-efficient vehicles and technology in Canada.

Our federal government has the tools to turn this crisis around and begin rebuilding a strong manufacturing sector.

This is critical for our future and that of our children and grandchildren.

Wayne Gates is president of The Canadian Autoworkers Local 199