INDU Committee Report

INTRODUCTION

The Conservative Party of Canada (CPC) wishes to submit a dissenting opinion concerning the report to the Standing Committee on Industry, Science and Technology from the Subcommittee on the Automotive Industry in Canada.

The CPC would like to thank those witnesses who appeared before the Subcommittee for their on-going interest in ensuring a strong and successful automotive industry in Canada.  This dissenting opinion is not meant to diminish the work of the Subcommittee but rather to correct the record on a single point in the final report which the Committee could not find the consensus to address; and, to further emphasize this government’s strong action and decisive vision for the auto sector.

The mandate of the Subcommittee was to review the current state of the automotive industry in Canada and make recommendations.  In coming to a consensus it is important for committee members to focus as much as possible on the facts and substance of information presented and the testimony of witnesses.  Avoiding opinion and potentially biased re-interpretation of facts presented to the committee is essential to providing sound advice and recommendations to the House of Commons.

Paragraph four (4) of the subcommittee report begins with the assertion: “Although not part of a comprehensive industrial strategy, federal and provincial governments have funded some of the more recent investments in automotive assembly plant and equipment.”  Regrettably, the first clause of this sentence is open to many possible interpretations.  This opening to paragraph four could leave the unfortunate impression with the reader that the federal government has no strategy for the automotive industry in Canada.  The subcommittee’s overview of the automotive industry covers a much longer period than just the last three years and while it may be true that the previous Liberal government had no automotive industry strategy to speak of, nothing could be further from the truth when it comes to the current Conservative government. In fact, many witnesses repeatedly praised the government both for its actions during the current global crisis and for its long-term vision.

CANADA’S AUTOMOTIVE STRATEGY

Canada's strength as an automotive nation has been built on a powerful value proposition. We use this value proposition to attract global capital and mandates from multi-national giants. In addition to our highly skilled workforce, we provide a stable investment climate, including solid economic fundamentals and a comprehensive Economic Action Plan that are helping strengthen the Canadian industry even in the midst of the current global economic climate.  

All of the stakeholders in the automotive industry are looking for new approaches and initiatives that will keep Canadian industry at the forefront.  As one of the partners, the Government of Canada will continue to do its part. 

In 2006, the government introduced Advantage Canada, a comprehensive strategic action plan not only for individual industrial sectors, but for the entire Canadian economy. In February, 2008, the Minister of Industry announced important new initiatives that broaden and deepen our approach to the Canadian automotive industry. The approach outlined in this strategy is built on four pillars:

• sustaining sound fiscal and economic framework policies;
• supporting integration of the North American auto sector;
• investing in research and development; and
• creating an Automotive Innovation Fund.

Thus, as can be plainly seen, the federal government has provided details of its comprehensive strategy for the automotive industry.  Today, the automotive industry in Canada continues to restructure itself and the Government of Canada continues to play a key role in this process.  

Stakeholders and industry analysts agree that the Conservative government has established a clear automotive policy.  Mr. Dennis DesRosiers, perhaps Canada’s leading auto expert and one of the esteemed witnesses who gave testimony to the subcommittee, said the following regarding a National Automotive Policy:

"I was asked by the Committee last night what are some policy areas that Canada needs to address to help this industry and I was also asked to respond to the many who appeared in front of the Committee that said Ottawa needs a National Automotive Policy for Canada.. On the plane ride home l got to thinking and asked myself a very simple question? In what area of the automotive sector doesn't Canada have a well defined policy? And I couldn't think of any.  Our tax policy for innovation is one of the most generous in the world.  I can't identify an area where there isn't a very clear and usually positive policy initiative for the automotive sector.

"So most criticism of the lack of a National Automotive Policy is misplaced. The criticism is actually that the group doesn't like the policies in place disguised as the Government doesn't have a policy at all.  For instance, our Government will never put a protectionist trade policy in place .. period. So the CAW criticizes them for not having an Automotive strategy. We do have a trade policy it just isn't the ones our unions prefer.  It is the correct policy but they can't accept that."

He said in an earlier interview that “Mr. Flaherty and Mr. Clement have been brilliant in how they’ve handled this going way back ... They came out weeks ahead of the American government.”

The committee heard from Stephen Beatty, managing director of Toyota Canada, that “There’s no other country I’d rather be in. The Canadian automotive marketplace last year grew. It is unlike every other industrialized nation. There has been some fundamental health in the Canadian economy and that has been the result of hard work by government and by industry.”

Many witnesses specifically praised the government for investing in innovation through the Automotive Innovation Fund and for establishing the $12 billion Secured Credit Facility. Huw Williams, for example, from the Canadian Auto Dealers Association said, “We’ve been impressed with the fact that finance is absolutely seized with trying to get this program rolling as fast as possible. They seem seized in a very real way more than I’ve ever seen before from finance officials about trying to get this Secured Credit Facility out in the market place.”

Reid Bigland, president of Chrysler Canada said “the Canadian Secured Credit Facility that was pledged is some of the exact medicine the automotive industry in Canada, from a sales perspective, needs in order to get back to health.”

CONCLUSION

In a period of significant global economic instability and industrial restructuring the federal government is working to keep the Canadian automotive sector strong and at the forefront of innovation.  The Conservative Party of Canada believes that the Canadian automotive industry can and should remain a source of pride to Canadians, and a powerful engine of growth for our economy, for many generations to come.