Feds cool Ford's hopes; Harper has made it clear he won't support specific projects, says Ont. premier

IDNUMBER 200801170003
PUBLICATION: The Windsor Star
DATE: 2008.01.17
EDITION: Final
SECTION: News
PAGE: A1 / FRONT
BYLINE: Nicolas Van Praet and Sonja Puzic
SOURCE: Canwest News Service; Windsor Star
WORD COUNT: 672

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Feds cool Ford's hopes; Harper has made it clear he won't support specific projects, says Ont. premier

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Responding to accusations that Prime Minister Stephen Harper is refusing to provide financial aid to the auto industry and help reopen the Ford Essex engine plant in Windsor, Finance Minister Jim Flaherty said the federal government is not in the business of subsidizing individual corporations.

Ontario Premier Dalton McGuinty said Wednesday that Harper has made it clear he is not prepared to support specific projects, such as providing money to help bring the proposed assembly of a new V-8 engine to the Lauzon Parkway plant, which closed in November as part of Ford's massive restructuring.

During their meeting last week, McGuinty said Harper told him, "Look, I operate at the macro level. We'll cut taxes, offer some regional incentives, but we're not prepared to take it one step down."

In an e-mailed statement to The Star, Flaherty said: "Once again we have Dalton McGuinty running a government with the highest taxes on business investment in Canada."

"And taxing all businesses, as I say at the highest rate and then selecting which businesses, which corporations he wants to subsidize. That is certainly not our approach federally."

The Ontario government said last June it would make $650 million available under its Next Generation Jobs Fund to promote new environmentally sustainable transportation technologies. The province has said it will use $30 million of that to help restart Ford's Essex engine plant. Windsor Mayor Eddie Francis has said the project needs another $30 million from Ottawa.

Bill Osborne, Ford of Canada's outgoing chief executive, said Tuesday Ford is waiting for word from the federal government on whether it will also help relaunch the plant.

He declined to detail the amount Ford is seeking.

The Harper government has so far declined to provide financial assistance to specific companies. Jim Prentice, federal industry minister, said Monday that the major issues facing the auto sector include changing consumer preferences, not new investments.

"We're quite mindful of the challenges the industry faces," he said.

NDP MP Brian Masse (Windsor West) said such comments send the message that "Canada is closed for business in the auto sector.

"I think we're going to find a lot of examples of hypocrisy involved in this," he said, adding that the government has funded specific projects in other sectors, such as the oil and gas industry.

"I wonder whether that means they're going to repeal the multi-year funding that has been provided to a number of different projects that have been initiated prior to them coming to government," Masse said.

Conservative Essex MP Jeff Watson has been silent on the issue. His assistant, Nancy Jahn, said Wednesday he would not comment on "hearsay," referring to McGuinty's comments about Harper's approach to the auto industry's woes.

McGuinty said his government is at odds with Harper's over how to help the manufacturing sector.

"They think you cut taxes, sit back and allow economic fortunes to kind of play themselves out," McGuinty told reporters before a cabinet meeting at Queen's Park. "I think we have a heavy responsibility, and that responsibility is to find ways to provide supports to those who are losing their jobs and provide incentives to businesses to make additional investments to make them stronger."

Those job losses continued this week as 500 workers at Guelph-based Collins & Aikman Canada, an autoparts maker in bankruptcy protection, found out their plant would close. It is the biggest manufacturing loss in Guelph since Imperial Tobacco announced in 2005 it would shut down, according to local reports.

Tom LaSorda, vice-chairman of Chrysler LLC, said this week Canada does far less than other countries in stoking its domestic car industry and making it an attractive place for auto investment.

Harper has promised to deliver a $1-billion aid package to help struggling sectors such as manufacturing and forestry, but only if opposition parties back the measure as part of the next federal budget. The federal NDP party said Monday it is prepared to vote against the budget and risk an election.

The Bloc Quebecois says it expects an election could be called within one month.

The current government doesn't have the auto sector at the centre of its radar, said Stephen Beatty, managing director of Toyota Canada Inc.

"The political parties are looking very carefully at their election map and saying 'where do I need the seats?' And if I were the current government, part of my election map would say Quebec. It wouldn't necessarily suggest southern Ontario."