Can manufacturers compete if based in Canada?

[Canuck E Stan]

Interesting article from the Globe and Mail written by Richard Paton,president of the Canadian Chemical Producers Association.

Losing Manufacturing jobs in Canada

Even thought the headline says one thing, obviously written by an editor who didn't read the whole article

While factories close, governments sleep

the article gives kudos to the committee on industry for their work.

We have recently seen some federal government leadership for manufacturing, following the excellent work by the parliamentary committee on industry, chaired by MP James Rajotte. The committee examined manufacturing woes and issued a unanimous report with 22 recommendations. Its first recommendation, a two-year capital cost allowance for new investments in plants and equipment, was introduced in federal Finance Minister Jim Flaherty's budget and more recently by provincial Finance Minister Greg Sorbara in Ontario. This is a very encouraging sign that we can work together.

But there is a problem with keeping business here.

How can we provide a climate in Canada to encourage business to stay and to build the manufacturing sector.

Where have we gone wrong and how do we turn it around.

[geoffrey]

The manufacturing sector has only been here artificially. All the bailouts and such have kept them afloat, but it's also made them huge, unresponsive to demand and unable to compete with better structured foreign competitors.

The focus of the government has always been on preserving jobs. This the problem. They've artifically preserved more jobs than would ever exist, destroying any chance at streamlining the process.

Our manufacturers have been subsidized to death by the government.

[cybercoma]

The only way North America can compete for manufacturing jobs is to become communist like China and end up allowing companies to pay employees pennies a day.

[sharkman]

Here's a weird example, Kirkland Jeans, from Costco, are made in Canada and are around $17 a pr. Super cheap, and they are actually decent. I don't know how they do it, all other clothes are made offshore and cost at least double.

[Canuck E Stan]

The only way North America can compete for manufacturing jobs is to become communist like China and end up allowing companies to pay employees pennies a day.

I don't think that's true, look at the Toyota factories in Ontario.

The workers there make more than the workers of the CAW and have a product that is in high demand.

The offshot of a place like Toyota provides even more secondary jobs.

I agree with geoffrey, the government has done a poor job on bringing jobs here and spends too much $$$ trying to keep them from leaving.

So how do we get more of these jobs into Canada?

[August1991]

Can manufacturers compete if they are based in Canada?

Ho-hum.

An industry lobbyist writes an article lobbying for special measures for his industry. What special measure?

Its first recommendation, a two-year capital cost allowance for new investments in plants and equipment, was introduced in federal Finance Minister Jim Flaherty's budget and more recently by provincial Finance Minister Greg Sorbara in Ontario. This is a very encouraging sign that we can work together.

He wants a tax break for his industry.

Why doesn't he advocate an across thye board income tax break? That would benefit employees and shareholders in his industry - and everyone else too.

He also wants lower electricity prices:

Ontario used to enjoy a competitive advantage when it came to electricity: modern generation with a mix of fuels, reliable transmission infrastructure and a young, highly skilled work force. Now its electricity rates are among the highest in Canada.

(He fails to mention that Canadian electricity prices are among the lowest in the world.)

IOW, he also wants Canadians to subsidize his industry through low electricity prices. (While Canadians are paying world prices for gasoline.)

But what I really admire is how this lobbyist wraps himself in the flag and presents his personal (or induistry) problem as a problem for us all:

Canada has a well-trained and educated work force and ever-improving infrastructure - but today's global investors take that as a given first step. We can compete in today's global marketplace if we have the right business conditions, the attitude and the desire to restore our proud legacy as a leading manufacturing centre in North America.

Suddenly, the threat to this industry is a threat to all "well-trained and educated" Canadians.

----

There is a simple answer to this guy: the Sun competes with all of Canada's hydros. The Sun offers energy and light more cheaply than Hydro-Quebec, Ontario Hydro and BC Hydro could ever generate it.

Should we give special tax breaks to Hydro employees because the Sun can provide light more cheaply?

Any time a lobbyist complains that foreigners can do it cheaper, just think of the Sun and Hydro.

[Catchme]

Great post august1991, agree completely. industry already gets lower electrical prices than everyone else, they also get municpal tax breaks, and sometimes provincial.

People forget when theyhear corporations whining for consessions, they really are all about maximizing profit margins in whatever way they can.

Cross provincial marketing of goods and services, as well as products would do a great deal for Canada.

The automotive manufacturing sector is really a bird of its own nature as it depends on massive markets, However, not many other manufacturing sectors require such a large market share to make decent profits.

Canada used to have a huge garment manufacturing industry. So it was a good story about Cosco jeans.

Nowadays "brand" names get just as cheap, if not cheaper, manufacturing of products and it is people who are willing to pay the hugely inflated prices for the ego gratification of wearing that brand name, and the status it represents. Brands name prices are really individuals paying for visible socio-economic positions, and thereby the attendant priviledged considerations that that staus confers..

[Canuck E Stan]

Can manufacturers compete if they are based in Canada?

Ho-hum.

An industry lobbyist writes an article lobbying for special measures for his industry. What special measure?

Its first recommendation, a two-year capital cost allowance for new investments in plants and equipment, was introduced in federal Finance Minister Jim Flaherty's budget and more recently by provincial Finance Minister Greg Sorbara in Ontario. This is a very encouraging sign that we can work together.

He wants a tax break for his industry.

Why doesn't he advocate an across thye board income tax break? That would benefit employees and shareholders in his industry - and everyone else too.

He also wants lower electricity prices:

Ontario used to enjoy a competitive advantage when it came to electricity: modern generation with a mix of fuels, reliable transmission infrastructure and a young, highly skilled work force. Now its electricity rates are among the highest in Canada.

(He fails to mention that Canadian electricity prices are among the lowest in the world.)

IOW, he also wants Canadians to subsidize his industry through low electricity prices. (While Canadians are paying world prices for gasoline.)

But what I really admire is how this lobbyist wraps himself in the flag and presents his personal (or induistry) problem as a problem for us all:

Canada has a well-trained and educated work force and ever-improving infrastructure - but today's global investors take that as a given first step. We can compete in today's global marketplace if we have the right business conditions, the attitude and the desire to restore our proud legacy as a leading manufacturing centre in North America.

Suddenly, the threat to this industry is a threat to all "well-trained and educated" Canadians.

----

There is a simple answer to this guy: the Sun competes with all of Canada's hydros. The Sun offers energy and light more cheaply than Hydro-Quebec, Ontario Hydro and BC Hydro could ever generate it.

Should we give special tax breaks to Hydro employees because the Sun can provide light more cheaply?

Any time a lobbyist complains that foreigners can do it cheaper, just think of the Sun and Hydro.

Thank you August and Catchme for offering solutions to the question of what we can do to bring manufacturing into Canada.

If industry is getting all these advantages,why isn't there more of it in Canada?

We do have a problem in this country with manufacturing and I hear your complaints,but I don't hear your solutions.

150,000 lost jobs since 2002,what's your answer to bringing them back....bitchin' isn't going to convince anyone to come here or stay here. Solutions will,what's yours?

[Posit]

"The problem is, it is not sustainable. We need to change the way we do business … We need to change our priorities and adjust our values." Business success, he said, should no longer be measured on growth alone and must produce benefit for society and the planet."

"Our capitalist model has given us tremendous things," Trudeau said. "But the time has come for us to look at it critically and try to improve on it, given the accelerated pace of change and the fact that we have limited space."

Justin Trudeau.

[theloniusfleabag]

Dear Canuck E Stan,

If industry is getting all these advantages,why isn't there more of it in Canada?

It is highly likely that certain industries/businesses 'kick back' some monies made from these breaks into political party coffers.

We do have a problem in this country with manufacturing and I hear your complaints,but I don't hear your solutions.

150,000 lost jobs since 2002,what's your answer to bringing them back....bitchin' isn't going to convince anyone to come here or stay here. Solutions will,what's yours?

As cybercoma states, one way is...

allowing companies to pay employees pennies a day.

Another way would be to abolish unions.

The 'market' is basically set up so that the greatest consumers are not also the greatest producers (of any specific commodity, generally speaking).

[cybercoma]

It's a time game. It may not be in our lifetime, but the pendulum will swing. The quality of life will rise significantly in these countries where employees make pennies a day and are well off for it. As their QoL is raised, they'll subsequently make more money until it is no longer cheaper to manufacture over there. With shipping costs and everything, it'll no longer make sense to ship manufacturing overseas. I think manufacturing jobs in a global market will swing back and forth unless there's a wrench thrown in the works.

[Topaz]

Companies want tax write-offs, low property tax and quality work and Canada does have quality when it comes to making the product. Yeah, they go over to third-world countries and get the work done but is it good or even excellent quality. I don't think most of it is and in the auto sector, we build better quality autos than the US.

[cybercoma]

Can you show that products made in China are still of poorer quality than those made here? I don't think that's the case anymore. In fact, I don't think most people know where most of their stuff is made nowadays.

[Posit]

Not true IMO.

Western corporations depend on poor countries to produce cheap goods to maximize profits. In order to maintain the balance of high income earners earning high profits, they must take from the bottom. It really is a matter of inputting cheap labour in exchange for high profits.

As well, since the west over produces it must find more markets in order to sell those cheapply produced goods in order for the investors to skim the cream off the top. If companies fail to exploit new markets then investors pull out and the company goes down the tubes,, demanding that it exploit the workers for cheaper production costs.

The only way to sustain such crazy business practice is to either reduce the investment profit returns taken out of the system by the rich, or by retuning to balanced capitalism where the employees are also considered to be consumers and treated as the only important focus of the business.

[jdobbin]

Our manufacturers have been subsidized to death by the government.

They also get subsidized in China by an artificially low currency.

[White Doors]

Can you show that products made in China are still of poorer quality than those made here? I don't think that's the case anymore. In fact, I don't think most people know where most of their stuff is made nowadays.

Well you can look into the pet food thing for one.

They have crap laws there and thinsg made in China are generally much worse quality than pretty much anywhere else in the world.

[Leafless]

Where have we gone wrong and how do we turn it around.

How about Canadians supporting the North American automobile manufacturers by buying their products.

[jdobbin]

How about Canadians supporting the North American automobile manufacturers by buying their products.

Do you check the labels of every item you buy and buy Canadian?

[Posit]

How about Canadians supporting the North American automobile manufacturers by buying their products.

Why would anyone do that? The Big 3 put their investors ahead of their customers and their products. They have no concern for us so why should we care about them?

They "Buy the car your neighbour makes..." was a flop.

As to other products, I prefer to spend my money on local products made by local artisans and manufacturers. If a corporation owns the business I refuse to buy. That IMO, is the way to bring corporations to their knees and boost the local economies at the same time. The minute anyone walks into a WalMart they have helped destroy the local economy.

[runningdog]

As to other products, I prefer to spend my money on local products made by local artisans and manufacturers. If a corporation owns the business I refuse to buy. That IMO, is the way to bring corporations to their knees and boost the local economies at the same time. The minute anyone walks into a WalMart they have helped destroy the local economy.

...too true. I always ask where it comes from and try (where possible) to buy local and directly from the farmer if possible.

[geoffrey]

Our manufacturers have been subsidized to death by the government.

They also get subsidized in China by an artificially low currency.

Sure. The Chinese also have no standard of living because of it. I think we should let them make our stuff, we'll send them a pitance for their efforts and we get sweet stuff and pay little for it.

Great deal.

Subsidizing the automakers has rendered them absolutely unable to compete with the Japanese and Koreans, and even to an extent with the Europeans (though the Euro's are subsidized heavily too). Why anyone would think it would improve by giving more money to whatever industry is beyond me. Subsidies destroy companies, end of story.

[jdobbin]

Sure. The Chinese also have no standard of living because of it. I think we should let them make our stuff, we'll send them a pitance for their efforts and we get sweet stuff and pay little for it.

Great deal.

Subsidizing the automakers has rendered them absolutely unable to compete with the Japanese and Koreans, and even to an extent with the Europeans (though the Euro's are subsidized heavily too). Why anyone would think it would improve by giving more money to whatever industry is beyond me. Subsidies destroy companies, end of story.

I agree that subsidies hurt industry. Canada could drop all protection for oil, gas, manufacturing and services and save that money and reduce taxes thereby offering incentives for industry to remain.

[madmax]

Is there anyone involved in manufacturing posting in this forum?

PM me if so.

[Leafless]

How about Canadians supporting the North American automobile manufacturers by buying their products.

Do you check the labels of every item you buy and buy Canadian?

Certain items I check the label.

But many made in Canada items, compared to imported products, don't stand a chance of maintaining competitive viability, whether I buy the product or not.

These Canadian manufacturers are destined not to survive and will only be a matter of time before they permanently shut their doors.

I think only the specialized manufactures stand a chance of survival and is what they are doing in the U.S. for instance and why they can still lead the world as one of the top manufactures.

Third world countries are good at cloning many products, but there is a limit to their expertize and quality of individual components.

Reliability, will be the ultimate test with items such as automobiles, produced by countries like China.

[jdobbin]

Certain items I check the label.

But many made in Canada items, compared to imported products, don't stand a chance of maintaining competitive viability, whether I buy the product or not.

These Canadian manufacturers are destined not to survive and will only be a matter of time before they permanently shut their doors.

I don't know that you can ask people to buy made in Canada manufacturing when you yourself have an inconsistent approach to it.

I looked at North American models for my last new car purchase in 2005. They were all found wanting in every area.