Lana Payne: Canada’s industrial strategy breathes new life into economy

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|July 21, 2023

Originally published in the Windsor Star.

Canada’s industrial economy is being jolted back to life.

In April, Volkswagen announced plans to build its first-ever North American battery cell manufacturing facility in Ontario. That followed what has been an impressive, and historic, string of automotive investments in the past three-years, catalyzed by commitments our union secured in 2020 contract talks with the Detroit automakers, including at Ford, Stellantis and then later at General Motors. And despite months of complex and challenging negotiations Stellantis and LG Energy have resumed construction of its automotive mega-project in Windsor – a lynchpin in Stellantis’ growing Canadian EV production footprint.

In less than three years, Canada’s auto industry has gone from an apparent global manufacturing “has-been” to “has-it-all.” Automakers are pouring tens of billions of dollars into production plants and factory towns across the country – roughly $25 billion at last count – building a truly pan-Canadian auto sector, from car assembly to critical minerals.The two largest-ever factory investments in Canadian history occurred in the past twelve months.

Tens of thousands of jobs are being created and retained in the manufacturing sector, not counting the tens of thousands of spin-off jobs that add to the employment footprint in Canada. Dormant industrial spaces are transitioning back into hubs of next-generation production and research – lining Canada’s path to net-zero. Manufacturing has long been a stronghold for good, union jobs in the private sector and an economic driver for regional economies, and this sector is getting a shot in the arm.

Let’s be perfectly clear that what’s happening in the auto sector isn’t happening by accident.

There are no theoretical market forces guiding us toward new assembly programs and battery plants, which is making more than a few ivory tower, tax-cut loving economists a bit squeamish.

The fact is this industrial renaissance is happening because governments are investing in making it happen.

It wasn’t that long ago that most wrote off Canada’s manufacturing sector – and the nearly 2 million workers it employs – as all but dead.

Somehow, the desire to physically produce things in Canada became a symbol of economic failure. Some politicians would recoil at the idea governments would invest funds to target and win new global product mandates – direct investments that pay back through job growth, industrial spin offs and new economic activity.

Instead, and in past decades, Canada took the easy path. Governments relentlessly pursued free trade agreements, mainly to help sell natural resources to the world, with no domestic industrial anchor. They catered to the business class by cutting corporate taxes and loosening rules, with no obligations to invest in our country, or our workers. Recall that the Harper Government drained Canada’s budget by an ungodly $60 billion through corporate tax giveaways, with little to show for it.

The problem is this: By not investing strategically, and articulating an economic vision, workers always end up the loser.

We’ve warned of the perils of this for decades, and now have further proof after COVID exposed the brittle, risky supply chains.

This offshoring of work is partly why Canada’s auto industry shrunk so significantly over 20 years, nearly halving its production capacity, closing four vehicle assembly plants and wiping out nearly 50,000 jobs.

It’s also why Canada lags in other industrial spaces, like steelmaking, shipbuilding, rail, bus and aerospace manufacturing, and so many others.

The ‘fingers-crossed’, ‘hope for the best’ approach to economy-building is never good strategy. Finally, today, governments are investing in real workplaces and in jobs.

Investing directly in big industrial projects also provides government new leverage, as stakeholders, to maximize the economic returns to Canadians. In exchange for inking a deal to support the new Windsor battery plant, governments set conditions that Stellantis must follow through with product mandates for its Brampton Assembly Plant. This bodes well for Unifor members at the plant.

Unifor expects corporations receiving public funding will not just respect the rights of workers to unionize but will enable the exercise of those rights – through voluntary recognition agreements and committing to staying neutral and non-confrontational during organizing drives. There must be zero tolerance for anything less.

Economy building through industrial strategy was once taboo in Canada. Now its back and we are all the better for it.

It unshackles us from the thinking that tied Canada’s economic destiny to the free market, to the whims of global capital – and the unemployment line.

It allows us, finally, to think big – build big – and maximize the benefits to working people across the country.

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