Social Policy in Ontario

Ottawa outsources the attack on the middle class

Posted on February 6, 2012 in Policy Context

Source: Toronto Star — Authors: Tim Harper

TheStar.com – news/canada/politics
Jan.6, 2012.    By Tim Harper, National Affairs Columnist

As it hauls its billions in profits south of the border, Caterpillar executives should make a detour and stop in Ottawa to drop off the money they owe Canadian taxpayers.

Failing that, the Conservative government should be waiting for them at the border demanding the tax break and handout cash looted from the federal treasury.

But since both scenarios are highly fanciful, it is time for an end to the scattershot, no-strings-attached tax breaks being tossed from Stephen Harper’s government to large multinationals that are using it to drive down the standard of living in this country.

Friday’s closing of the Electro-Motive Diesel plant is simply the most egregious example of taxpayers’ funds being used to try to bust unions or ship jobs out of the country.

It has been tried by U.S. Steel in Hamilton, which shut down a plant and locked out workers until it finally won a litany of concessions from battered workers.

When it sought Canadian approval to buy Stelco, it promised to maintain average employment at 3,100 and to produce a minimum amount of steel there for three years.

Instead, within the year of winning Ottawa’s okay, U.S. Steel began a series of layoffs, shutdowns and lockouts so blatantly counter to its agreement with the Conservative government, Ottawa took it to court.

The Conservatives have since meekly settled out of court after the union and company came to an agreement late last year.

Having easily won its peace with a feckless government, the Pittsburgh-based company has again refused to restart its Hamilton steelmaking operation while its U.S. operations run at 90 per cent capacity.

The Hamilton economy took the U.S. Steel hit and now braces for 200 more layoffs in April.

Brazilian mining giant Vale moved into Sudbury in 2006 and by 2009 was locked in the most bitter strike in the history of the community, a year-long battle in which it forced pension concessions, used replacement workers and tried to divide the 3,100-strong union.

They didn’t pull out only because, as University of Toronto labour historian Laurel MacDowell says, “the resources are in the ground.”

Rio Tinto is watching events closely.

The Anglo-Australian mining giant, which took over Alcan in 2007, has locked out almost 800 unionized employees at its smelter in Alma, Que., because it wants to replace retiring unionized workers with non-union workers earning half the salary.

Under the Investment Canada Act, such takeovers are supposed to demonstrate a “net benefit” to Canada, but, in fact, are acting as an anvil on wages, living standards and the prosperity of communities in central Canada.

MacDowall says breaks should only be offered to small or medium companies that actually want to set up shop and create jobs here.

Both opposition parties in Ottawa have called for a review of the Investment Canada Act, which has been exposed time and time again as a paper tiger by foreign corporations in this country.

The NDP says tax credits to companies should be tied to job creation — the credit would only kick in when the jobs are created.

Federal Conservatives largely ran for cover but the few who were brave enough (or ordered to) face the cameras Friday were quick to engage in buck-passing.

They blamed Ontario for not bringing the parties together, while offering message-track sympathy for the workers.

The Dalton McGuinty government hardly covered itself in glory on the Caterpillar file, but this is not a jurisdictional question.

Every politician, federal or provincial, who stood by and watched this performance — where a 50 per cent pay cut was somehow described as an “offer” rather than the threat it was — has to answer for their neglect.

As the company flees for the green, green grass of “right-to-work” Indiana, the Harper government’s silence amounts to it outsourcing the race to the bottom for the Canadian middle class, allowing its multinational friends to do the dirty work.

These are the same middle-class unionized workers from whom the Conservatives will again be seeking support in 2015.

< http://www.thestar.com/news/canada/politics/article/1126578–tim-harper-ottawa-outsources-the-attack-on-the-middle-class >

Tags: economy, ideology, standard of living

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