Mark Collins – If Feds Bail Out Bombardier, Can Ontario Auto Sector be Far Behind?

Further to this post,

CSeries: Bombardier Wants $1B from Feds…

surely the new government will not want to take a big political hit in Ontario, where almost all that industry is–and with the provincial government already holding out very demanding hands (and not supplicant ones given the help the Ontario Liberals gave their federal friends during the recent national election):

Canadian auto sector alarmed by concessions revealed in full TPP text

GM-Canada-Oshawa

Greg Keenan, The Globe and Mail

Key players in Canada’s vital auto sector say Justin Trudeau’s government now faces a major decision: whether to seek changes to the massive Trans-Pacific Partnership trade deal – an agreement, the just-revealed text shows, that offers worse-than-expected terms for Canadian vehicle parts makers.

“They’re going to have to take a look at this closely, see what has been negotiated and decide whether they want to pursue renegotiation of any element of the agreement,” said Mark Nantais, president of the Canadian Vehicle Manufacturers’ Association, which represents the Canadian units of the Detroit Three auto makers.

The full text of the wide-ranging Trans-Pacific Partnership accord was finally made public Thursday [Nov. 5], one day after Mr. Trudeau’s government took office…

Mr. Nantais’s group, which employs close to 20,000 Canadians, is unhappy with how Canada consented to eliminate a tariff on imported Japanese vehicles far more rapidly than what was agreed to by the United States. Canada will do it in five years, while the U.S. will take as long as 30…

The deal offers Canadian companies long-sought access to Japan’s massive consumer market, but it would also eliminate tariffs on Japanese vehicles and make it easier for manufacturers to use offshore parts. It would be a boon for low-wage Asian suppliers of parts, but a challenge for Canadian firms.

Canada’s auto parts makers, who employ 81,000, say the text of the agreement shows the local-content protections for vehicle components are significantly skimpier than the former Conservative government had advertised. Former prime minister Stephen Harper had said local-content requirements for important vehicle components would be between 40 per cent and 45 per cent.

But two key areas of Canada’s auto-parts industry will receive less protection than expected. “We got worse terms on key parts than we were originally told,” Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association, said Thursday.

Engine parts and such body stampings as truck frames and metal roof panels will only be required to have TPP content of 35 per cent…

The Ontario Liberal government on Thursday urged Ottawa to deliver auto-sector aid in the wake of the TPP deal, saying it’s worried about the accord despite the market potential it offers…

Ain’t cooperative federalism great, what with all that corporate welfare likely to flow from Ottawa?

Mark Collins, a prolific Ottawa blogger, is a Fellow at the Canadian Global Affairs Institute; he tweets @Mark3Ds

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4 thoughts on “Mark Collins – If Feds Bail Out Bombardier, Can Ontario Auto Sector be Far Behind?”

  1. The big winners of TPP are countries that aren’t in it. China & North Korea are good examples. Both are now able to provide up to 65% of the content in vehicles. What did they give up to get that? Nothing.

    The idea of free trade was supposed to be that wages would gradually rise around the world so that it wouldn’t be a race to the bottom on wages. That will never happen because we are allowing countries like North Korea, China etc that don’t allow wage pressure in for free.

    No government official is going to admit it but ALL Candians are going to have to get used to much lower wages and Canada will have a much harder time competing than most. While you can live on $8,000/yr in Mexico you will never be able to do it in Canada because our houses have to be built to withstand Canadian winters.

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