So, Mike drew my attention to this snippet in the local media today. Finance Minister Jim Flaherty stopped by Chesterville, ON, a town that has seen the Nestle plant close, with consequent job losses. His upbeat message? The high loonie is good news for manufacturing in Canada, we're booming, lots of jobs, etc. etc.
Now, I'm not an economist, but it doesn't seem quite right to me that a Finance Minister can stand up and say a high dollar is good for our manufacturing sector, when in reality it is pricing us out of world markets, both in terms of cost of goods and cost of labour. It's partly to blame for the shrinking manufacturing sector and the loss of jobs.
That Jim Flaherty should make this speech in Chesterville, with the Nestle closure still raw, Cornwall's Domtar closure just along the river and Smiths Falls' Hershey closure just north, seems particularly ill-conceived. What were his advisors and handlers thinking?
There is good news in the economy for sure, but can't we have some good old-fashioned political savvy back in the Conservative Party? Let's try to make sure we're pitching the right message to the right audience at the right time. This speech could be seen as adding insult to injury in the audience to which it was addressed; it's not good economics and it's even worse politics.
3 comments:
Maybe you are the one who missed economics? For years the low dollar protected Canadian industry from competition, efficiency gains, and productivity gains, and union myopia. Now that the real world is intruding, and people are finding out that unions are part of the problem, and that they should have been investing in modern equipment and methods all along, the complaining is stareting and the hands are coming out.
I never studied economics, but I grew up in Thatcher's Britain, where she was setting to rights all those same wrongs, particularly when it came to curbing the unions.
I'm not saying that realities aren't realities and that they don't intrude, I'm just saying that making a speech like that in an area that just lost 2,000 jobs is just dumb politics. It's one thing to make people take their medicine, it's another to rub their noses in it.
Anon is right, our manufacturing industries have not had to become efficient because of a low dollar. The smarter manufacturers have adjusted.
Now, as far as people losing their jobs, this is going to happen more frequently because of the high union wages and pensions in Canada. If you owned a new business, would you locate it in Canada and pay your workers $25/hour + benefits, or in China?
The saving grace is that they were yelling about jobs moving to Mexico just a few years ago, this didn't happen to the extent they thought it would, because it's cheaper to use a plant in Canada that already exists, and once you train Mexican/Chinese workers, they demand higher wages, so the advantage is lost. Also stability is important, look at how Chevez is privatizing the oil and gas industry, would you invest there right now? So, Canada is a stable economy, and will remain so for years, this attracts investment dollars.
Canadian industries need to get competitive, the major problem is unions. Look at how many strikes we have had lately, even here in Alberta, we have Molson striking. Problem is that with a global economy, cheap beer can be brought in from Barbados (Banks beer is awesome), and our workers lose.
So, unions are necessary, but they must be careful, protect jobs, but not if your demands force companies to go to other countries.
Post a Comment