A policy vision to escape the race to the bottom

Cahier spécial : A policy vision to escape the race to the bottom

J’ai passé en travers du document

‘Re-thinking Canada’s Auto Industry provenant de la
 CAW ‘Canadian Auto Workers union April 2012’

La phrase clé est pertinente:

‘A Policy Vision to Escape the Race to the Bottom’

Car elle est fondamentale, veut-on devenir comme les Américains où il y a plus de 46 millions d’Américains qui sont sur les 'foods stamps', plus de 50 % de la population qui fait moins de 32,000 $ et leur pouvoir d’achat s’est contracté de 14 ans.

US Taxe brackets

Millions on foodstamp



US median household

Elle est fondamentale, si nos gouvernements ne corrigent pas cette situation en se protégeant contre le dumping social, on risque de devenir à moyen terme dans cette même situation, étant nos voisins directs,  leurs pauvretés vont influencer notre compétitivité, nos salaires et à toute fin notre pouvoir d'achat.

Même si le document se concentre sur l’industrie automobile, la problématique est la même pour l’ensemble de l’industrie du Canada, voici, certains extrait que j’ai pigé dans le document.

Summary :

A Policy Vision to Escape the Race to the BottomCanada’s auto industry has endured incredible
economic turbulence in recent years. It was under pressure for years,

·         In the face of growing imports pressure from low cost foreign jurisdictions (like Mexico and the deep south of the U.S.),

·         And declining market share for North American-based automakers.

Then came the global financial crisis, the resulting plunge in vehicle sales, and a historic make-or-break moment for the North American industry.

The recent stability in the industry is welcome, however it is clear that Canada’s auto industry is not out of the woods yet.

Global pressures on the industry are more severe all the time

Corporate executives are more aggressive, even ruthless, in using their power to relocate investment in order to extract continual belt-tightening from workers, suppliers, and governments alike.

The recent events at the former Caterpillar locomotive plant in London, Ontario (where a giant global corporation, enjoying record profits, closed a profitable Canadian facility after its workers refused its demand for a 50 percent cut in compensation) highlights the risks Canadians face in a world in which global corporations are given free reign, with no accountability or obligation to the communities in which they earn their profits.

Auto executives, despite an impressive rebound in profitability and strong growth in continental vehicle sales, continue to demand dramatic reductions in future compensation and working conditions from their Canadian workers, on threat of disinvestment.

The take-off of Mexico’s auto industry, the prospect of new free trade agreements with dominant auto producers (like Japan, Korea, and the EU), and the continued overvaluation of the Canadian currency all heighten the challenges as Canadian auto stakeholders seek to cement future rounds of crucial investment in our plants and products.

Impacts of a Canadian dollar

The paper considers in detail the impacts of a Canadian dollar which has been driven by petroleum obsessed financial investors to levels far above its fundamental fair value.

But we look more expensive solely because of the distorted currency; what should be a labour cost advantage for Canada is converted into an apparent cost disadvantage because of speculative financial pressures in oil futures and foreign exchange markets.

The overvaluation of the loonie (relative to purchasing power parity benchmarks) imposes a continuing $3.7 billion annual penalty on domestic value-added in auto manufacturing.

·         This is an enormous burden which the industry cannot continue to shoulder;

·         Since Canada can no longer rely on large surpluses with the key U.S. market to cross-subsidize these deficits with all other trading partners.

we must adopt a new approach

In other words, there is no excuse for inaction on the part of our governments in the struggle to protect Canada’s share of this industry, the decent middle-class jobs which it provides, and the enormous spin-off benefits it generates through our communities and our entire national economy.

The global “race to the bottom,” through which workers in any country are told to accept poverty-level living standards or else lose their jobs altogether, is neither “natural” nor inevitable.

Corporations can make these demands today only because governments have organized the rules of the game to give them complete freedom and power. This was done with the promise that all would share in the resulting “trickle-down” benefits.

Tout à fait exacte, la mondialisation débridée n’est apparue grâce à une collusion entre le pouvoir politique et l’oligarchie, ou vous l’a imposé, vous n’avez jamais donné votre accord.

Canadians deserve a fair share of the jobs and prosperity that come with manufacturing the products that we continue to buy, in large numbers. This policy vision, which fundamentally re-thinks how we approach industrial strategy in a globalized economy, would allow us to do just that.

It’s about our community.


Tables des matières

1.       A policy vision to escape the race to the bottom

Summary :

Global pressures on the industry are more severe all the time

Impacts of a Canadian dollar

we must adopt a new approach

2.       Decline in auto manufacturing employment in Canada

To Hell and Back – Canada’s Auto Industry After the Crisis

Industrialized countries experienced a decline

Preventing plant closures

Government intervention

3.       Automotive trade deficit reached an all-time record of $15.6 billion

Auto  Industry - Free Trade

Canada-U.S. Auto Pact

World Trade Organization

Trade Balance


4.       CANADIAN Petro-Dollar

CANADIAN Petro-Dollar

5.       Race to the bottom

Race to the bottom

Donc, à qui profite la mondialisation ?

Les gagnants

6.       Productivity, Investment and Technology

Productivity, Investment and Technology


Investment and Technology

7.       Center of gravity is clearly shifting south

Re-thinking Canada’s : A New Policy Vision

And it won’t stop there

We do not accept this grim scenario as natural, efficient, or inevitable.

8.       Free trade theories failures

Re-think Trade Policy

With every other trading partner

Optimistic predictions of the free trade theories failures

Canadian trade negotiators have a responsibility

9.       The Bank’s power to bring down the dollar is unquestioned

Intervene to Reduce the Canadian Dollar Exchange Rate (1)

Canadian dollar r far above value

Theory freely floating exchange failures

Bank of Canada interventions.

10.    Restrict foreign resource takeovers

Intervene to Reduce the Canadian Dollar Exchange Rate (2)

Slowing down resource developments (especially in the oil sands)

Preventing foreign takeovers of Canadian resource assets

11.    Canada back is a lack of political creativity


Willingness by policymakers to play an active role.