Social Policy in Ontario

Ottawa’s manufacturing fund a mirage

Posted on November 27, 2014 in Delivery System

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TheStar.com – Opinion/Commentary – Almost two years after announcing a $200-million advanced manufacturing fund, Ottawa hasn’t released a cent.
Nov 27 2014.   By: Carol Goar, Star Columnist

There is a $200-million pot of money in Ottawa earmarked for Ontario’s hard-hit manufacturing sector.

The Advanced Manufacturing Fund (AMF) was announced in February 2013 by then-finance minister Jim Flaherty. It was officially launched last December by Minister of State Gary Goodyear, who speaks for Ontario in cabinet. It was cited by Prime Minister Stephen Harper in April at a forum hosted by the Kitchener-Waterloo and Cambridge chambers of commerce as proof of his government’s efforts to promote the province’s economic growth. It has been re-announced by various cabinet ministers.

To date, not a single project has been approved. Not one dollar has been released. Not one job has been created.

It took some tenacious detective work by NDP industry critic Peggy Nash to ferret out this embarrassing fact. She submitted a written question to the government about the all-but-forgotten fund. Goodyear delivered the answer: “Applications are still under review and no contribution agreements have been executed.”

Softening her boss’s cryptic statement, Erica Furtado, Goodyear’s spokesperson, suggested that an agreement would be concluded “in the coming weeks.” Applications take time to analyze, she explained. They demand a high level of technical knowledge and involve outside partners (universities and research institutions). “Our government is ensuring these complex and multi-partnered applications undergo rigorous review.”

Manufacturers tell a different story. They say the rules are so onerous and restrictive they discourage many innovative companies.

What is clear is that the money is not flowing. There is a striking mismatch between the government’s professed desire to “push Ontario to the forefront of high-tech manufacturing” and its inability to deliver. There is a strong suspicion that the disbursements — when they finally do come — will be concentrated in the months before next October’s election.

Ontario’s manufacturers could certainly use a vote of confidence. The sector has shed 300,000 jobs in the last decade. The list of recent plant closures is long and demoralizing: Caterpillar,U.S. Steel, Kellogg’s,Unilever,Novartis,ExxonMobil Packaging and the John Forsyth Shirt Company. The once-powerful auto industry has shrunk in the province, drawn away by lower wages and larger subsidies in Mexico and the southern U.S. The factories that are left — which still account for 800,000 jobs — are struggling to compete in the global marketplace.

The Harper government has correctly diagnosed what ails the industrial heartland. “The nature of manufacturing is evolving and, at the same time, Canada faces heightened competition from advanced and emerging economies, increasingly in high value-added segments. That is why the AMF will invest in advanced manufacturing in Ontario and contribute directly to an innovative and sustainable manufacturing base.”

It has set the right goals:

– To support transformative technologies.

– To foster collaboration between universities and the private sector.

– To encourage the development of clusters and supply chains.

– To build momentum to be more competitive on the global stage.

What is missing is any semblance of an efficient followup.

The agency in charge, the Federal Economic Development Agency for Southern Ontario (FedDev Ontario), has had plenty of time to process the applications. It has an adequate budget: $184 million a year. It has a clear mandate: “develop the right tools, strategies, partnerships and funding to ensure the region grows and attracts the smartest minds and the most promising ideas to market.” And it has a political mission: to address the perception among Ontarians that Ottawa is neglecting them.

But since FedDev Ontario was created five years ago, that feeling has deepened. Harper has done — and continues to do — everything in his power to market Alberta’s bitumen. He promotes Canada abroad as a safe, reliable supplier of energy. He fends off calls from world leaders, provincial premiers and the public to put a price on pollution on the grounds it would slow growth in the oilpatch. Canada subsidizes fossil fuel producers to the tune of $34 billion a year, according to the International Monetary Fund.

In the last three months alone, Harper and his ministers have pushed billions of dollars out the door in infrastructure funding, tax relief for small business, income splitting for parents, a doubling of the tax credit for children’s fitness and a boost to the universal child-care benefit.

The message they are sending to Ontario’s manufacturers: Keep waiting.

< http://www.thestar.com/opinion/commentary/2014/11/27/ottawas_manufacturing_fund_a_mirage_goar.html >

Tags: budget, economy, ideology, jurisdiction, standard of living

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