TORONTO, Sept. 30, 2011 /CNW/ - Tim Hudak's promise to end all provincial government subsidies to
business, in the name of ending so-called "corporate welfare," would
destroy Ontario's chances of winning new auto investments that are
crucial to the future of several Ontario auto communities, warns CAW
National President Ken Lewenza.
"The puritan Conservative position against subsidies is driven by
ideology, not economic reality," Lewenza said in Toronto. "If enacted,
this promise would mean we'll never receive another major auto
investment in this province."
Hudak's pledge to end all business subsidies appears on page 15 of the
Conservatives' "Changebook" platform document.
In capital-intensive, globally mobile industries like auto and
aerospace, it is a near-universal practice for host governments to
provide a range of incentives to attract new investments (including
capital grants, infrastructure subsidies, and training subsidies).
In Ontario for the last decade, every major capital project by global
automakers has received major financial support from both the federal
and the Ontario governments. Typically, each level of government kicks
in about 10 per cent of the capital cost of the new investment, for a
combined subsidy of around 20 per cent. This has been the practice
both at new "greenfield" sites (such as Toyota's new plant in
Woodstock) and for the retooling of existing factories.
Several major Ontario auto facilities will require major retooling
within the term of the next Ontario government, including plants in
Brampton, Oakville, Ingersoll, Oshawa and Windsor.
"Without significant participation by both the provincial and federal
governments, not one of those crucial projects will go ahead," Lewenza
said. "Tens of thousands of auto jobs in Ontario will be jeopardized
if a Hudak government puts naïve philosophical convictions ahead of
concrete support for this vital industry."
"Of course, we'd all rather see companies investing in this province out
of a sense of social responsibility," Lewenza said. "But that's not
how most industries work anymore. You have to have money on the table,
in order to play in the game."
Government participation is all the more important today, Lewenza noted,
in light of actions by competing jurisdictions (including the U.S. and
Mexico, which also pay large investment subsidies), the over-valued
Canadian currency, and the need for auto companies to invest in new
environmental technology and other innovations.
About 95,000 Ontarians currently work in auto assembly and components
manufacturing. About 9000 new auto jobs have been regained in the
province since June 2009 - the worst point of the global financial
crisis. (Source: Statistics Canada Catalogue 281-0023). Government
participation in rescuing GM and Chrysler, and supporting a range of
recently-announced investments (by companies like Ford, Magna, and
Toyota), has been essential to that partial rebound.
SOURCE Canadian Auto Workers Union (CAW)
For further information:
For further information, please contact Shannon Devine, CAW Communications Director at 416-302-1699