Union calls for Canadian national auto policy

Canada risks losing vital economic contributor: Report
|labour-reporter.com|Last Updated: 04/18/2012

The Canadian Auto Workers (CAW) union is calling for a national automotive industry policy that would end free-trade negotiations with auto manufacturing countries, like Japan, unless they agree to open their markets to Canadian-made vehicles.

"There is no conceivable scenario under which Canadian automotive exports to these countries would be significantly enhanced under a free trade agreement," the union said in its 50-page report titled Re-Thinking Canada’s Auto Industry." Indeed, Japan's tariffs on automotive imports are already zero… so it is hard to imagine a free trade deal having any impact whatsoever on its auto purchasing patterns."

Released on April 16, the union made the proposals in a policy paper it will discuss at a series of public meetings in Canadian auto-manufacturing cities.

Canada is one of the only auto producing countries in the world that doesn't have a formal national auto policy, CAW national president Ken Lewenza said in a press conference.

“The key difference between Canada and jurisdictions like Germany, Korea, Japan and even the U.S. is not labour costs (which are high in all industrialized countries),” the document says. “The key difference is a willingness by government to play an active, guiding role in building an industry and constructing an international advantage.”

The CAW is calling their policy a “bold vision,” outlining the following initiatives it wants the government to undertake:

  • reduce the value of the Canadian dollar
  • secure Canadian manufacturing commitments from auto companies
  • hold public minority shares in auto companies
  • investigate the realities of building a Canadian car manufacturer
  • work towards building a Canadian “green auto industry”
  • implement a buy-Canadian vehicle procurement strategy

The CAW acknowledges the extreme position it takes on Canada’s currency, but says it’s not impractical, suggesting an intervention from the Bank of Canada.

"While in theory the global financial system relies primarily on a system of freely floating exchange rates, in practice governments and their central banks regularly intervene in currency markets to influence currency outcomes," the report says, noting China has a banking system that is operated by the state.

The union has begun to circulate a petition demanding Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty employ a national auto policy.

“Other countries around the world support their key value-added industries (like auto) with proactive policies, including fair trade policies,” the petition reads. “It’s time Canada did the same.”

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