The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.
Jim Stanford is an economist with the Canadian Auto Workers union, which represents both the workers at the Hitachi factory in Guelph and the closed Caterpillar factory in London.
How refreshing it was to open Monday’s Globe and Mail and actually see good news from the Canadian manufacturing heartland. Greg Keenan reported on the expansion of Hitachi’s factory in Guelph, Ont., that makes enormous trucks for mining operations; the plant is doubling output and employment.
Ironically, while the Ontario-made trucks are sold to mining operations across the Americas, Europe and Africa, it doesn’t supply trucks to the biggest mining project in the world, right here in Canada: Alberta’s oil sands. Those super-sized trucks, unfortunately, are imported – from companies such as U.S. heavy equipment maker Caterpillar. It’s a lucrative business: Caterpillar’s Alberta distributor, Finning International Inc., reported record Canadian revenue of almost $3-billion last year (up 30 per cent).
But while Caterpillar makes billions from Canadian resources, the company just closed its only Canadian manufacturing facility: a locomotive factory in London, Ont., that it bought in 2010 from Electro-Motive Canada. Caterpillar is shifting the work to plants in Mexico and right-to-work Indiana. Apart from slashing labour costs, another factor in Caterpillar’s location decisions is the “Buy American” policy, which requires high U.S.-made content in federally funded projects (including rail transport).
Now, adding insult to injury, the United States will actually subsidize sales of Caterpillar’s American-made locomotives back to Canada. The U.S. Export-Import Bank (owned by the U.S. government) is providing preferential financing for the purchase of Caterpillar locomotives for an iron ore mine in Labrador.
The irony is painful. Canada is an increasingly important resource producer. Companies such as Caterpillar, which profit immensely from those resource developments, are under no compulsion to manufacture anything here. Fuelled by oil prices, our loonie trades 25 per cent above its fair value in purchasing power terms – making it all the more expensive to buy Canadian-made machinery for our own mines.
Our government, meanwhile, stands idly by while preferential policies in the U.S. and elsewhere reinforce the exodus of manufacturing jobs from Canada – including jobs in the production of high-tech equipment to extract our own resources.
For the rest of this article, please go to the Globe and Mail website: http://www.theglobeandmail.com/news/opinions/opinion/how-about-buy-canadian-for-resource-projects/article2368348/