Harper's Economic Plan a 'Desperate Act,' CAW President Says

October 7, 2008, 4:00 PM EST


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Prime Minister Stephen Harper's announcement today of additional financial support for the auto and aerospace industries is a "desperate act" that will make little difference to Canada's battered manufacturing sector, according to Ken Lewenza, President of the Canadian Auto Workers union.

"Mr. Harper is more concerned with his party's crisis in the opinion polls, than the economic crisis in Canada's manufacturing communities," Lewenza said. "This new program, announced just a week before the election, will not significantly relieve the catastrophe of job loss being experienced across our manufacturing belt."

Harper has pledged to expand support for the federal Automotive Innovation Fund by $50 million per year, and for the Strategic Aerospace and Defense Initiative by $50 million per year, for four years in both cases. He also pledged to unilaterally eliminate tariffs on imports of machinery and equipment used by manufacturers.

"For two and-a-half-years, Mr. Harper's government said it was wrong to pick winners. Then, just days before calling the election, he made a giant U-turn and offered financial support for auto investments in Windsor and St. Catharines. Now, seven days before the vote, and with his party plunging in the polls, he suddenly finds more money for the industry."

"This financial support is important, necessary, and appreciated. But this is no way to build an industry for the long-term," Lewenza said. We need a consistent, long-run vision for supporting crucial industries - not just short-term, political initiatives."

Canada's auto industry has lost almost 30,000 jobs since peaking in 2002. Almost 20,000 of those jobs have disappeared since Stephen Harper's government was elected in January 2006.  Under Mr. Harper's government, Canada's once-mighty automotive trade surplus has crumbled into an auto trade deficit that will exceed $10 billion this year.

According to Jim Stanford, CAW Economist, the announced tariff reductions will have no meaningful impact on investment decisions.  "Canada imports almost $100 billion per year in machinery, computers, and electrical and electronic equipment. Tariff savings of $345 million will make no visible difference to that cost.  Indeed, a one-cent change in the value of the Canadian dollar will have more impact than this tariff," Stanford said.

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