This week I attended the swearing in of new municipal councils in Oshawa and Scugog and the motto of the City of Oshawa struck a chord following the difficult news of the last week. Labour and Prosper. Such a fitting description for Oshawa and our entire region. Durham is known for its hard-working and skilled workforce and we have enjoyed a long period of prosperity because of it. Generations farmed the same fields as their parents and generations found work at General Motors just like their parents did. Historically, the success of Oshawa was the embodiment of the role Ontario played as the economic powerhouse of Confederation. The announcement of the GM Oshawa closure shook our confidence as a region and it shook our confidence as a province.
The global success of GM is rooted in the industry of the Durham area and the vision of its leading entrepreneurs. I mentioned these origins during the emergency debate held in the House of Commons the day the closure was announced. The McLaughlin family moved its carriage works from Enniskillen to Oshawa at the turn of the last century and later became one of the primary financial backers of what became General Motors. In the process, Oshawa became the center of the burgeoning automobile industry in Canada and later a key driver behind the Auto Pact with the US in the 1960s which led to free trade between Canada and the United States. The jobs in Oshawa provided stability for our area and an unparalleled quality of life.
Read: “McLaughlin Motor Car Company”
The news last week was personal for many families, including mine. Like many kids, my father worked at “the Motors” when I was growing up and childhood memories of family events sponsored by the company or by the CAW (now UNIFOR) are happy ones. In high school, I worked at the GM battery plant as a co-op student and even considered attending the General Motors Institute (“GMI”) for university. Our region epitomized the concept of a “company town” and many families still have this connection through an employee or retiree. Fortunately, in the last two decades our economy has diversified with the growth of the energy, health and education sectors and with the expansion of small and medium sized employers across the region. This diversification will be critical as we rebound from the news from GM, but we must address the underlying issues that I believe led to GM Oshawa no longer being considered a competitive part of the GM assembly network.
The reality is the fact that GM no longer feels that Ontario is competitive enough for assembling the vehicles they intend to produce. Whether those vehicles are electric or big-selling trucks, GM did not see Oshawa as attractive for assembly as it once did. Why is that? Certain things remain unchanged. The GM Oshawa workforce remains one of the most productive in the GM network. The Canadian dollar remains a competitive advantage, as does our healthcare system that offsets some employment and retiree costs for the company. While these competitive advantages remain in place, provincial and federal changes in the last few years have eroded the Ontario advantage. Wage pressures caused by the Wynne government’s ill-timed minimum wage changes are one factor, as are the wild fluctuation of electricity prices in the last decade. On the federal side, I believe that tariffs, taxes, trade uncertainty and increasing regulation led GM to consider Ontario uncompetitive. These are factors I hear regularly from large and small manufacturers across the province.
Read: “Getting out from under Canada’s retaliatory tariffs can be a ‘heavy lift'”
“GM Oshawa and the Need for a Plan to Save These Jobs (November 26, 2018)”
The steel and aluminum tariffs imposed by President Trump are an unfair abuse of trade rules, but the Trudeau government could have gained an exemption for Canada if we had taken US concerns about Chinese commodity dumping and wider national security considerations more seriously. Some tariffs are not from the US, but are retaliatory tariffs imposed by Canada as a response to US action. The Trudeau government has not provided duty relief to many Canadian companies as promised and the Canadian tariffs are hurting many Canadian business far more than the intended US targets. This should be changed. On the tax front, I have been worried about the declining competitiveness of the Canadian economy from the first Liberal budget which imposed payroll taxes on employers. Subsequent budgets have taxed privately-held businesses in Canada and have advanced a national carbon tax.
Read: “Tories offer Liberals a NAFTA olive branch — with strings attached”
Read: “We should be championing small businesses, not hiking their taxes”
In Canada, taxes and regulation have been going up dramatically, while they have been going down in the US. It is increasingly harder for Canadian businesses to compete with the US despite superior workforces and other advantages. We must address these issues right away. While it may not be fast enough to have GM reconsider its Oshawa decision, we do not want other communities facing the same news as we did. We need to level the playing field in the great lakes region, so that our workers continue to have the ability to apply their labour for the prosperity of their family and our wider community.
