So what should we do, Mr. Ignatieff?

[bloodyminded]

I'm saying that, as in Afghanistan, it is pressure from the opposition which is helping to guide Harper in taking positions he considers to be more defensible and less open to simplistic but possibly effective attacks - despite the fact his personal inclination would be otherwise. Are you going to pretend political considerations of this nature don't take place all the time?

I'm saying that you're not quite as prone to generously recognizing (real enough, yes) political nuance in others as you are for Harper.

[Keepitsimple]

We don't have a trade surplus. We have a large trade deficit. Never listen to anything CR says without checking the facts.

My bad - I was in a hurry to get to a tennis game. I'll close down Wal-Mart in favour of Human Rights any day.

Wal-Mart Stores, Inc. (NYSE: WMT) is the world's largest retailer and grocery chain by sales. Wal-Mart is so large that its 2010 sales were almost 50% more than its 5 closest competitors combined, including Target (TGT) and Sears Holdings (SHLD).[1] Because of its mammoth size and buying power, Wal-Mart can buy its products at rock-bottom prices, exchanging high purchase volumes for low cost while passing the savings onto its customers. Many suppliers give in to Wal-Mart's pressure because they depend on the discount retailer for a majority of their sales.

Conversely, however, Wal-Mart's reliance on Chinese-made imports makes the company vulnerable to a weakening dollar or strengthening of the Yuan. Wal-Mart purchases billions worth of merchandise directly from China every year with many of its other inventory from companies like Mattel (MAT) coming indirectly from China. In fact, if Wal-Mart were a country, its imports are so substantial that it would be China's sixth largest export country.[2] In the summer of 2010, the People's Bank of China announced that it would "enhance the renminbi exchange-rate flexibility" which would allow the value of the Yuan to rise.[3] A stronger Yuan means that Wal-Mart will have to pay more for its merchandise from China, an issue that threatens Wal-Mart's bottom line.

Link: http://www.wikinvest.com/stock/Wal-Mart_(WMT)

Edited November 7, 2010 by Keepitsimple

[Machjo]

Yeah...

At the expense of Canadian shipbuilders!!!

Well, if the Chinese can produce ships at a lower cost, then whose fault is it?

[Saipan]

After listening to a American who lived in China for a few years, I don't buy anything from China if I can buy it from some other country.

In Thailand people routinely avoid Chinese food, even for pets.

[Saipan]

Well, if the Chinese can produce ships at a lower cost, then whose fault is it?

Greedy Unions.

And our government unwillingnes to implement slave labour. 'Specially prison productions.

Also unfair regulations. For example I should be FREE to choose foreign doctor or dentist who just came to Canada. Or lawyer. Or teacher.

[Machjo]

Greedy Unions.

And our government unwillingnes to implement slave labour. 'Specially prison productions.

Also unfair regulations. For example I should be FREE to choose foreign doctor or dentist who just came to Canada. Or lawyer. Or teacher.

Speaking of freedom or lack thereof, isn't that precisely what we're criticizing China for?

[Machjo]

Pot, meet kettle.

[Jack Weber]

Greedy Unions.

And our government unwillingnes to implement slave labour. 'Specially prison productions.

Also unfair regulations. For example I should be FREE to choose foreign doctor or dentist who just came to Canada. Or lawyer. Or teacher.

Clueless...

I worked at the Port Weller Dry Docks in St.Catherines...We signed a contract in 1998 for 5 years and NO WAGE INCREASES...Is that the union "greed" you are talking about?

The simple fact of the matter is,in regards to shipbuilding,most industrialized nations on this planet subsidize the industry in some fashion...

Mr.Mulroney,in all his wisdom,decided to end that policy in the mid-'80's...The resulting effect has been to completely decimate the industry across this country...

It was wrongheaded because the subsidies would have been made up in the massive gains in employment...

[bloodyminded]

Clueless...

I worked at the Port Weller Dry Docks in St.Catherines...We signed a contract in 1998 for 5 years and NO WAGE INCREASES...Is that the union "greed" you are talking about?

Perhaps Saipan objects to the notion that people without great wealth should have any say in the matter (in any matter) in the first place.

Edited November 8, 2010 by bloodyminded

[Machjo]

Clueless...

I worked at the Port Weller Dry Docks in St.Catherines...We signed a contract in 1998 for 5 years and NO WAGE INCREASES...Is that the union "greed" you are talking about?

The simple fact of the matter is,in regards to shipbuilding,most industrialized nations on this planet subsidize the industry in some fashion...

Mr.Mulroney,in all his wisdom,decided to end that policy in the mid-'80's...The resulting effect has been to completely decimate the industry across this country...

It was wrongheaded because the subsidies would have been made up in the massive gains in employment...

If other countries subsidize their shipping industry, then would it not be wise for Canada to exploit this to the fullest by simply importing ships that are being sold below their real value, paid for in part by foreign taxpayers?

Any wise government would exploit this foreign folly to its advantage. In exchange, we export what we can sell at advantage. Remember after all, that the only way for foreign countries to subsidize their shipbuilding industry is to raise taxes, thus putting the burden of the shipbuilding industry on other industries, and so as a result putting other industries at a disadvantage. So we can exploit this by buying their ships at below market price and sell everything else at market price, thus giving us a bigger bang for our bucks, and creating employment in other industries.

That said, I do believe that we need to raise taxes on our material resources so as to purposely make our resource industries less profitable, as a means of promoting preventing us from simply becoming a resource-based economy.

[Jack Weber]

If other countries subsidize their shipping industry, then would it not be wise for Canada to exploit this to the fullest by simply importing ships that are being sold below their real value, paid for in part by foreign taxpayers?

Any wise government would exploit this foreign folly to its advantage. In exchange, we export what we can sell at advantage. Remember after all, that the only way for foreign countries to subsidize their shipbuilding industry is to raise taxes, thus putting the burden of the shipbuilding industry on other industries, and so as a result putting other industries at a disadvantage. So we can exploit this by buying their ships at below market price and sell everything else at market price, thus giving us a bigger bang for our bucks, and creating employment in other industries.

That said, I do believe that we need to raise taxes on our material resources so as to purposely make our resource industries less profitable, as a means of promoting preventing us from simply becoming a resource-based economy.

That would be fine if there were'nt so many Canadian shipping companies on the Grat Lakes alone!!!We have almost 50 Lake Freighters between 3 companies trading between Thunder Bay and Quebec City.Most of those ships are almost 30 years old and are in dire need of either being rebuilt bow to stern,or at least have massive conversions done to them.This is longterm,high paying skilled labour that is required.

And we used to support the shipbuilding industry because everyone saw the spin off benefits,not just directly,but indirectly.Remember,St.Catherines is only 45 KM's from Hamilton,where two of the largest steelmakers on this continent operate.The fact that they are now in foreign hands is another thread altogether...

I would also agree with you if I knew we were'nt losing out work to such 3rd World countries as the United States and Poland because both of those countries see the benefit of the industry.The fact of the matter is that Mr.Mulroney,in all his free market wisdom,decided to essentially kill the industry in this country.And this is a country that has 3 of the 4 oceans on this planet surrounding us...

[Machjo]

The market will decide.

[Jack Weber]

The market will decide.

The market does'nt decide....The subsidy decides...And we are out of that business and shipbuilding is out of business because of it...

It's a shame because it could be a major employer in many areas of this country...

[Machjo]

The market does'nt decide....The subsidy decides...And we are out of that business and shipbuilding is out of business because of it...

It's a shame because it could be a major employer in many areas of this country...

Let's assume the worst-case scenario:

A country manages to subsidize all of its industries. Now, seeing that the only way it could possibly do this would be to borrow and spend, since any tax increase would put an industry at a disadvantage, we must conclude that it would be an unstable policy indeed. Sure we'd thus be at a trade disadvantage against that country on all fronts except where we have a product they simply do not have. The result would be that we'd all be buying that country's currency so as to buy their products. The result of that would be to push the value of their currency up in value to ours until we can no longer afford their money. The result of that of course is that we'd thus witness a boom in those products we have that that country doesn't have. And once that country goes bankrupt and has no choice but to tax and axe, suddenly it's payback.

Now a more realistic scenario. A country decides to subsidize key industries with money it gets from taxation. Well, those taxes are a burden on other industries. As a result, that industry is competitive against ours of the same category, but we have the advantage on all other fronts. As a result, we import their subsidized product and export all other products.

The rule of the game i the long run is that trade equilibrium must eventually return. The more we have a trade imbalance, the greater the pressure on the trade balance to return, usually via currency pressures.

So really there is no point trying to manipulate the international economy on that front since it will always return to equilibrium in one way or another. If we decided to subsidize our shipping industry, it would be on the backs of other industries, meaning that we'd be hurting one industry to benefit another, just like those countries are doing now.

We can take the car bailout in the recession for example. Sure it helped the car industry, but on the backs of all the other industries. It may have saved jobs in the car industry, but the interest lost on the investment will have to be paid for by the taxpayer, meaning a burden on other industries. In the end, it's a matter of sacrificing one for the other.

If we want to 'subsidize' anything, how about our human resources (i.e. make higher education free). That way, we're developing a resource rather than just subsidizing it.

[Smallc]

The National Shipbuilding Procurement Strategy should be a good subsidy for at least two yards, and potentially more if all of the small vessels get built.

[Jack Weber]

The National Shipbuilding Procurement Strategy should be a good subsidy for at least two yards, and potentially more if all of the small vessels get built.

I agree with that IF that extends to the merchant fleet...

I think I read somewhere that it does,which begs the question of infrastructure...Many of the major shipyards on the Great Lakes have been left for so long they are only good for winter repair work...

[Machjo]

The National Shipbuilding Procurement Strategy should be a good subsidy for at least two yards, and potentially more if all of the small vessels get built.

Again, why subsidize it at all? If the government has ships to buy for valid reason, then buy the damn ships, but don't give money out for nothing. And yes, if another country can give us a better deal than a Canadian shipyard, then I say import it. If other countries can build better ships than we can, then let us specialize in what we are good at rather than subsidizing what needs a subsidy. In short, if it needs a subsidy, then it's a waste of economic space. Retrain the workers who lose their jobs in the shipyards for work in growing industries that do not need subsidies.

[Jack Weber]

Again, why subsidize it at all? If the government has ships to buy for valid reason, then buy the damn ships, but don't give money out for nothing. And yes, if another country can give us a better deal than a Canadian shipyard, then I say import it. If other countries can build better ships than we can, then let us specialize in what we are good at rather than subsidizing what needs a subsidy. In short, if it needs a subsidy, then it's a waste of economic space. Retrain the workers who lose their jobs in the shipyards for work in growing industries that do not need subsidies.

The problem is that most countries don't have the skilled workforce we have here and can't build a ship better than we can...

When I was at PWDD,we could build a ship with less manhours,more automation,less rework,and,on time...And we still could'nt compete with ShangHai...Where the Chinese gov't subsidizes the industry,has no labour "interference" in terms of wages and on the job safety,and,no environmental regulation...And they build complete crap...

Sorry,I don't buy your free market sentiment...

[Smallc]

I agree with that IF that extends to the merchant fleet...

I think I read somewhere that it does,which begs the question of infrastructure...Many of the major shipyards on the Great Lakes have been left for so long they are only good for winter repair work...

Well, the very fact that 2 shipyards will be busy building large navy and coast guard ships continually will mean that they'll be able to have the skill and technology available to them. The other yards will be able to compete for about 100 smaller vessel contracts.

[dre]

Again, why subsidize it at all? If the government has ships to buy for valid reason, then buy the damn ships, but don't give money out for nothing. And yes, if another country can give us a better deal than a Canadian shipyard, then I say import it. If other countries can build better ships than we can, then let us specialize in what we are good at rather than subsidizing what needs a subsidy. In short, if it needs a subsidy, then it's a waste of economic space. Retrain the workers who lose their jobs in the shipyards for work in growing industries that do not need subsidies.

And yes, if another country can give us a better deal than a Canadian shipyard, then I say import it.

You have to take a lot of things into account though beyond the purchase price. For example the people working on ships built HERE will pay about 25% of their earnings to the Canadian government in taxes, and result in a lot of business for other Canadians as well (materials suppliers for example).

So to make it truly a "better deal" the foreign built ship doesnt just have to be cheaper it has to be 20 or 30 or even 40% cheaper.

[Machjo]

The problem is that most countries don't have the skilled workforce we have here and can't build a ship better than we can...

Excellent. So if that's the case, simply providing universal compulsory education for the population ought to be the only subsidy we need, right?

When I was at PWDD,we could build a ship with less manhours,more automation,less rework,and,on time...And we still could'nt compete with ShangHai...Where the Chinese gov't subsidizes the industry,has no labour "interference" in terms of wages and on the job safety,and,no environmental regulation...And they build complete crap...

Sorry,I don't buy your free market sentiment...

As I said, if we need quality ships, and Shanghai can't build ships to our specifications, then I guess we'll have no choice but to buy the higher-quality ships produced in Canada, right?

But then again, if we still couldn't compete with Shanghai, either their ships were of higher quality than you pretend to be the case, or they could better estimate the market. For example, I'm sure Toyota sells more cars than Lamborghini. That said, Lamborghini manages to survive owing to the performance of its cars. So, let Shanghai produce the Toyotas of ships, and we'll produce the Lamborghinis of ships.

The bottom line is, why should we subsidize an industry that cannot adapt? Does such an industry deserve my tax dollars? And why should we play favourites by deciding which industry to subsidize? If we're to subdidize the shipping industry, then why not all industries? Is it fair to subsidize one at the cost of another? Think about it, China's subsidies to its shipping industry ain't free. The money's coming from somewhere, either from inflation, government debt and high interest rates, or tax hikes. The bottom line is that China's subsidy of its shipping industry comes at the price of its other industries.

[Moonlight Graham]

Well, wrong.

We export $25 billion and only import less than $1 billion, mostly is cheap goods. However, considered in the value of the $Cdn versus the CNY and the labour costs the disparity is probably something like 500:1. So while we would lose $25 billion a year, if trade was lost they would lose an equivalent of about $1 million per year. Plus the Chinese have been artificially inflating their currency so it wold be even less value for them.

Do we not also help the Chinese economy by having Canadian products manufactured in China, like so many other nations? I doubt this falls under the "imports" label.

Does anyone know how much in manufacturing business Canada gives to the Chinese? I'm curious to see exactly how large (or small) the number is. If it is somewhat significant this could be leverage for Canada re: China.

Edited November 8, 2010 by Moonlight Graham

[Wild Bill]

As I said, if we need quality ships, and Shanghai can't build ships to our specifications, then I guess we'll have no choice but to buy the higher-quality ships produced in Canada, right?

But then again, if we still couldn't compete with Shanghai, either their ships were of higher quality than you pretend to be the case, or they could better estimate the market. For example, I'm sure Toyota sells more cars than Lamborghini. That said, Lamborghini manages to survive owing to the performance of its cars. So, let Shanghai produce the Toyotas of ships, and we'll produce the Lamborghinis of ships.

The bottom line is, why should we subsidize an industry that cannot adapt? Does such an industry deserve my tax dollars? And why should we play favourites by deciding which industry to subsidize? If we're to subdidize the shipping industry, then why not all industries? Is it fair to subsidize one at the cost of another? Think about it, China's subsidies to its shipping industry ain't free. The money's coming from somewhere, either from inflation, government debt and high interest rates, or tax hikes. The bottom line is that China's subsidy of its shipping industry comes at the price of its other industries.

You appear to lack direct experience with government purchasing. In lieu of, you are making some logical assumptions. Unfortunately, as is almost always the case when you apply logic to something run by the government, your assumptions are wrong.

I've had direct experience with government purchasing for several decades. It hasn't changed since before WWI and probably never will!

Most private company purchasing has made great progressive strides over the years. Concepts like JustInTime and rating buyers and their vendors not just by purchase price but by the 'soft' costs of delivery problems and shipping errors, which are hard to quantify but are very real, nonetheless. If a manufacturer's production line stops because of a delivery problem the costs can skyrocket very quickly. Suddenly having saved a nickel per piece when the purchase order was issued is "mice nuts" as a saving.

Not so with our governments. Buyers are rated by direct cost savings and nothing else. There is absolutely no tracking of a vendor's performance history. If you quoted the lowest price, you get the order. Period and end of story.

In theory, a vendor can be blacklisted but this is a rare event requiring something REALLY bad, like politically pissing someone off! It might happen once or twice a century.

Government purchasing has great difficulty accepting the concepts of improvements in quality and technologies. My field was electronics and government quotes routinely called for packaging methods for ICs and other semiconductors that were 30 years out of date! The industry had long since gone on to better and simpler methods but the government refused to change its specs. So vendors would either not bother to quote, since to do it the government way would eat up far more than the usual profit margin in manual labour to do it for them or they would inflate the price so high that if they actually got the order there would be enough profit to be worth it. I can remember filling a government order where we broke a standard quantity package of computer chips in order to package a small quantity in an approved fashion for a government order. Then we threw the rest of the standard package chips away! We made our money selling standard packages in quantity to manufacturers and our systems were optimized for that market. To break out a few pieces for the government and then have to wrap them the way it was done 30 years ago was not profitable business but simply a big pain in the ass!

In order to understand why the situation is the way it is you have to remember that government is by definition a political animal. There is no political profit in being progressive and current in your methods. The average citizen has no idea of what the government does or how it does it. So improvements would never translate into more votes for the government who initiated them.

So the better build quality of a Canadian shipyard is not a factor in bidding on government contracts. Why would it be? Look at the case of Harper's government and the F-35 fighter plane. Are they getting any credit for a better quality plane? Hardly! The Opposition and the media are lambasting them over the price! Who cares about the quality of the product? If Harper bought ships from Canadian shipyards you can bet your boots that Ignatieff and Layton would be all over him for spending more money than was needed.

As always there are no contradictions, just incorrect premises. The goal of a government purchasing system is NOT to efficiently purchase its needs! It is to not make any waves that would embarrass a sitting government!

[Wild Bill]

Do we not also help the Chinese economy by having Canadian products manufactured in China, like so many other nations? I doubt this falls under the "imports" label.

Does anyone know how much in manufacturing business Canada gives to the Chinese? I'm curious to see exactly how large (or small) the number is. If it is somewhat significant this could be leverage for Canada re: China.

I doubt if we give them enough to matter, MG. You have to understand that the entire Canadian market is only as large as ONE American state, that being California!

China is efficient and low cost because it is set up to produce goods in very high volumes. You see very few low volume, niche market items coming out of China.

China produces for the USA, then Europe and after that the rest of the world. Canada is only a tiny portion of their market. We don't really wave a contract at China to produce goods for us. It's more a case of China producing stuff anyways cheaply because of the total volume of all their customers and Canada rides along with the flow.

Electronic parts, textiles, anything made of plastic in a mold - these products are like silk-screened tee shirts. You can't make any money making only a handful of shirts. You have fixed setup costs. It costs $100 to make one shirt or $100 to make 50. You bring down your price by making more copies of the same shirt, once your setup costs are covered.

In comparison to the global market, Canada is a customer who wants 5 tee shirts...

[Shakeyhands]

Greedy Unions.

And our government unwillingnes to implement slave labour. 'Specially prison productions.

Also unfair regulations. For example I should be FREE to choose foreign doctor or dentist who just came to Canada. Or lawyer. Or teacher.

It's funny that you should blame the "Greedy Unions" for jobs being off shored, manufacturing or otherwise.

I, for example, used to work for IBM Canada and see things a little differently. IBM used to have thousands more employees in Canada, not near as many now. We used to have tech support, accounting, inside sales, manufacturing and a bunch of other departments here that serviced both Canada and the US. In fact I would say the 'in kind' numbers between the US and Canada were pretty even. As you know, IBM is NOT unionized.

In about 2002/03 (approx) we started to lose jobs here in Canada, first tech support went to India, then accounting went to Brasil, then manufacturing went to China and so on... Why do you think that happened Saipan?

Do you think it was a non existent greedy union?

Do you think it was the fact that workers in these places cost the company a lot less?

People will say it was the latter of course, but lets look at this example from the shareholder view. Some who are shareholders own say a few thousand shares of IBM, some more, some less. The exec's at IBM, at least the top ones (like Palmisano) own hundreds of thousands. Who profits, mightily I might add, to offshoring jobs and bringing in a few cents per share?

I'd say it's not the greedy unions Saipan, but the greedy executives. The people who were employed by companies like IBM in Canada made up our middle class, we are disappearing and we are going to end up with a lot of people scratching a living doing low paying jobs while the rich get richer.

At the end of the day, I'd gladly pay a few more dollars to have something made, sold and serviced by my neighbour. It just makes sense.