MASSE RESPONDS TO FISCAL UPDATE & DEMANDS AN AUTO STRATEGY NOW

HANSARD - December 1, 2008 – Automotive Industry

Mr. Brian Masse (Windsor West, NDP): Mr. Speaker, I will be sharing my time with the member for Winnipeg North.

As well, Mr. Speaker, I want to start by congratulating you on your appointment to the chair. I know that you had a campaign for Speaker, and now you have been ably selected.

Although I have spoken in the House of Commons a number of times on different issues, it is the first time I have had a chance to give a speech. I want start by thanking the residents of Windsor West for re-electing me. It is an honour and a privilege to serve in the House and I thank them for their confidence. As well too I want to thank the volunteers and the many people who gave up their time to make sure that the campaign was successful.

Particularly I want to thank my family, my wife Terry, Alexandria my daughter and my son Wade who I miss every single day but I know that the work that we do in the House of Commons can make a difference for their future.

That is one of the things I want to focus on in terms of my speech with regard to the fiscal update. It is really disconcerting when we saw the update come forward with a lack of action on a stimulus package and also a lack of commitment for the government to do so.

In particular, in my region the auto sector has been struggling for a number of years and we have been seeking solutions for reinventing the industry in many respects. We put together over five years ago a green car strategy with Greenpeace and the CAW to look at modernizing the auto industry and making sure we were going to protect jobs and also environmentally improving not only the emissions but also the way that we design and make the vehicles.

It is important to note that there have been those who have described the current condition of the auto industry as one where we have to work toward a bailout. I would counter that with regard to history. History has shown that in the past when there has been support for restructuring, for example Chrysler, the United States was very assertive and Canada was too to provide leadership.
From that if we look at a plant like mine inWindsor West where it produces the minivan, they have been doing it for 25 years now because of that commitment. Taxpayers' money that went into providing credit at that time actually paid a dividend back to them, so the taxpayers of Ontario and also the taxpayers of the United States actually reaped millions of dollars back as the company bought shares back.

It is important to note because it is not about providing a blank cheque, as those who have made innuendo that would see this diminished opportunity. In Canada we are totally different than the United States. Last year in the United States they moved rapidly. They worked together on an energy bill. In that energy bill is $25 billion for the auto industry in the United States to move it to new technologies, greener technologies and also there has been political support to say that they want to save their industry. It has been very overt there whereas here we have been very passive and having to catch up.

If we compare that $25 billion set aside for loans and other types of research and development on the American and we look at the Conservative government's last budget the Conservatives actually cut money from the auto industry. They had a program, the ecoAuto feebate program which was a terrible program. I agree with that. When it was put in place they actually subsidized vehicles made in Japan, Korea and other parts of the world. Our taxpayer dollars went out to those other actual production facilities as purchasing of those models included that aspect.

Instead of reinvesting that money. The government decided to cut that outright. What they kept was the tax on the auto industry which they rolled into a $50 million a year fund for $250 million over five years.

We can see the big difference of what was happening in United States versus what was happening here in Canada.

Likewise we know that when the U.S. automakers went to Washington it was a debacle. They should have and rightly so gone to the table with a proper plan. They did not have that and were reprimanded for that. However there was a clear signal there that they would be drawn back because the workers' interests were more important.

It is not the fault of auto workers in this country because the management did not move quicker to greener technologies, nor is it their fault about the liquidity problem the United States has been facing. While the Prime Minister during the election was explicitly saying that we do not have the same problem here and we do not have the same housing issues. In fact, we saw housing properties drop in my riding during that time, so he was wrong again. What the Conservatives failed to tell Canadians is that we have 85% of our auto sales going to the United States. When the United States has a crisis there needs to be action here when we have that type of connection to their market and their economy.

The consequences are obvious as we have seen the market dry up.

What did the government do? It provided billions of dollars in support to the Canadian banking industry but did nothing for our automotive sector. It is interesting to note that the interest savings that should have been passed on were never passed on.

Let me give an example of where we could have seen some better muzzling of the industry and a good example is with respect to interest rates. We did nothing with respect to this.

I am offended with my bank TD Canada Trust. If it were not for the good service provided by the people there I would leave this banking institution. This institution provides car loans at the rate of 4% above prime. It will make more money on a car as it is financed through the system.

Some credit unions have car loans at prime or prime plus 1%. This rate lessens the cost for the consumer and also ensures that profits are not a priority. The priority should be the workers and the companies so they can be profitable.
There has been no discussion about some of the facts regarding investment in this industry as it affects the Canadian economy. I want to highlight a couple of important things, especially when it comes to innovation.

The industry has invested more than $35 billion in Canada over the past decade. This accounts for more than 17% of overall manufacturing investment.
We did a study in industry committee and one of the things that was obvious was that the oil and gas sector puts less than 1% of its money back into research and development in Canada yet this is the sector which seems to get the lion's share of attention from the Conservative government. It basically sucks money out but it does not come back to us.

R and D in Canada is already low compared to other industrial states. Canada is around 8% but it should be higher. R and D in the oil and gas sector is abysmal, yet it continually gets government support. This at a time when we should be reinvesting in those sectors that have had some trouble, not through a fault of their own and not through a fault of the worker. That is important to note.

The Minister of Industry, along with others, have made several comments about auto workers. In trying to negotiate with the CAW he was basically trying to negotiate through the media instead of sitting down and meeting with them. The CAW and its leadership waited for a number of days for a response to their letter but the minister never responded. He instead went public demanding the CAW to do its part.

I want to correct the record so that people know that the CAW has been doing its part and is willing to keep doing its part. It has shown a lot of progressive work which has landed this investment here.

There is no doubt that auto wages are high. They are 50% higher than the Canadian average. However, productivity is even higher at $300,000 added per worker. That is four times the Canadian average. The workers know they have to be productive onsite. They have actually lowered their per vehicle hour assembly rate so it is even lower than some of the offshore auto market suppliers such as Toyota and others. Our workers have been able to reduce their auto assembly hours whereas Toyota's hours have gone up as has its costs.

Wages in the auto sector are falling. Labour costs are approximately 7% of the total auto assembly cost, which is actually low. Wages are higher in Germany and Japan. It is not that auto workers here are in a different situation. It is simply that auto workers in Germany and Japan get paid more.

It is important to recognize that the big 3 auto companies and their unions have already come to the table with $900 million worth of savings through restructuring and by changing their agreements. They are doing their part today for the economy.

What is missing is the fact that the federal government has not done its part. There is no national auto strategy. There is no sectoral strategy. There is only a corporate tax cut which does not help the auto sector because it is not making money right now.

On top of that, the government is phasing out the capital cost reduction allowance. It is going to reintroduce a tax on the auto industry, and that is unacceptable.

Men and women who are the best in the world and through no fault of their own are unemployed. It is time for a national auto strategy and the time is now.

Mr. Brian Masse (Windsor West, NDP): Mr. Speaker, the member spoke to the issue with regard to banks. I think it provides some additional opportunity to interject some facts that are important for the discussion, especially given the fact that the member has admitted again, like his party, that there is no role for regulation with the banks, which is absurd because that is part of the responsibility of the Government of Canada.

It is interesting, because the Conservatives talk about distancing themselves further when the banks have received over $100 billion of support from provisions of the federal government.

Specifically we have federal government CMHC purchases, pooled together mortgages from the banks, $75 billion for that; a bank account that offers short term credit through PRA to banks, $50 billion-plus for that; the Bank of Canada offers short term credit through PRA to private money markets, $5 billion there; the Bank of Canada established a new term loan facility to assist banks and others, $8 billion there; the Bank of Canada releases treasury bills to investment dealers, $10 billion there. Also the federal government agrees to guarantee loans to private banks and the Bank of Canada accepts asset-backed commercial paper as collateral. What do we get from that? Not a single thing.

The banks instead have told the hon. member they will actually raise credit cards on his constituents and he does not care. That is unacceptable.

Mr. Brian Masse: Mr. Speaker, I appreciate my colleague's question. His office is on my floor so I know he works late, and I respect his work in the House of Commons.

When we look back in history, it has not cost taxpayers when they have reinvented the industry and worked on it. That is why I went through very specifically the situation with the Chrysler minivan that has now been produced for 25 plus years in my city. It is one of the biggest exports this country has. It is clear we have to make sure of those conditions.

We are talking about loans. We are being very specific that we want it tied to research and development and a new green economy. It is important to discuss regaining some of our market share. That is out there.

Those are the elements we have to look forward to in terms of a plan. In terms of dollars, it would actually be a loans program, because that would be the most appropriate.