My View: Canada needs "hands-on" leadership

June 10, 2010

While it appears that the global economy is beginning to recover, Canada’s economy remains quite fragile.

The Conservative government’s hands-off policies and short-term vision have continued to devastate jobs, particularly in Ontario’s industrial base. Manufacturing is a major economic factor in our province, but the recent global economic downturn and this Conservative government’s policies have left many of the factories in Southwestern Ontario, and elsewhere in Canada, with no option but to shut down for good.

Our manufacturing base has been hollowed out and is only a mere shell of what it once was. The industrial heartland is becoming barren. Many of these industries have simply gone under, moved south, or been taken over by foreign owners.

One major factor is Prime Minister Stephen Harper’s policy of allowing more and more foreign buyouts of our companies and our natural resource industries. Companies like Falconbridge, Stelco, Inco and Alcan have all been bought out by foreign conglomerates.

While foreign investment in Canada is important, we should not allow our natural resources and large industries like Nortel to fall under foreign control. We end up losing out on highly-skilled “value-added” jobs as well as our intellectual property.

In addition, it is not acceptable for these companies to buy up Canadian companies with an agreement to keep jobs here, then subsequently close down operations and move them south of the border. For example, Stelco was bought out by U.S. Steel on the condition that it keep Canadian operations running, but then violated that agreement and closed down those operations.

This is part of a wider problem that the Harper government is ignoring. Their lack of commitment to rebuilding our industrial base and protecting Canadian companies as the U.S., U.K. and other governments do will continue to hurt our industries and will make Canada less competitive in the global marketplace.

Their lack of direction is evidenced by their refusal to invest in innovation, skills-upgrading, research and technology.

President Barack Obama is making one of the largest investments in research and technology and in green energy the U.S. has ever seen. The U.S. is spending six times more per capita on green energy R&D than Canada is spending. That is because President Obama recognizes where the global marketplace is going. He aims to make the U.S. a world leader in green technology and, unless Canada makes similar investments, we will be left trailing other industrialized nations. According to a recent report, Canada has already lost 66,000 green energy jobs to the U.S. alone.
The brain drain is back.

Our leading Canadian researchers and innovators are seeing these massive investments by other countries and are moving to the U.S. and Germany who are making these investments; meanwhile this Conservative government is cutting back on these initiatives.

The Harper Conservatives still do not see education and supporting research and development as keys to Canada’s economic success. They slashed $140 million in funding for research councils last year, cut the National Research Council of Canada, and scrapped fifty years of Canadian leadership in nuclear medicine.

Harper has even gone so far as to cancel the ecoENERGY rebate program for homeowners. This very popular measure provided grants up to $5,000 to Canadians who aim to make their homes more energy efficient by installing a high-efficiency furnace, water heater, new insulation, etc. Despite it being promoted in the 2010 budget, the Harper government quietly cancelled the program at midnight on March 31, 2010.

We need to support and encourage research and innovation by assisting companies in investing in new technology to remain competitive as well as train our workers to be the most highly-skilled labour force in the industrialized world.

President Obama explained how investing in research and new technology would create new jobs in a visit to a battery factory “Celgard” in April 2010. He explained that the U.S. will have electric cars that will require new batteries and he wants to manufacture those batteries in the U.S. and not have to import them. These cars will require a new electricity grid which means upgrading infrastructure and creating even more jobs.

The workers at that battery factory could see how these investments would save their jobs and create new ones as well. Investments in research and technology end up saving their jobs and creating more jobs for their community. Everything is interconnected in this new economy and to remain competitive we must innovate and create more jobs in our own communities.
Pension plans vulnerable
More and more companies are phasing out pensions or moving away from defined benefit plans. More Canadians are worried about being secure in their retirement. Those without savings will be the poor seniors of tomorrow.

In fact, most Canadians do not have company pension plans and the CPP alone is not enough for Canadians to live on in retirement; couple that with the fact that the majority of Canadians only have an average of $45,000 in RRSPs when they retire, and therefore rely on Old Age Security, Guaranteed Income Supplement, and the CPP which simply is not enough.

People will be suffering if we as a country cannot fix this problem. Finance Minister Jim Flaherty appears to have no interest in dealing with this problem. Holding an endless series of “consultations” the Conservative government is no closer to addressing the crisis than it was two years ago when it promised to have a plan “within 90 days.”

What is needed is a supplementary CPP to assist Canadians in saving for retirement. Many Canadians can only invest small amounts in RRSP’s and they do not work for the vast majority of Canadians. While the Government of Canada shells out billions of dollars in deferred taxes through RRSP’s, the real benefit to Canadians is through the CPP, which proved to be one of the most stable pension plans through the recent global economic meltdown. While RRSPs are useful for approximately 10% of Canadians a supplemental CPP would really make a difference for the average Canadian.

Stephen Harper’s answer to this is to cut and shrink the role for government even further. He does not see a positive role for the government to play in the lives of Canadians. He has no interest in rebuilding our industrial base, creating green jobs, or preparing our economy for the future.

Instead, he wants a limited role for government. However, that means service cuts to citizens. Many Ontarians will remember the impact of similar cuts by the Mike Harris government in Ontario. Four Harris throwbacks now sit on Harper’s front bench. The cuts that they are making will mean fewer services for our families, our children, and our seniors.

We need a government that works with our best minds, business, scientists, provinces, and cities so we can have a strong social and economic future.