Carney’s recovery solution fails to please autoworkers
Bank leader downplays role of dollar in export woes
It was an unusual meeting: A Harvardeducated central bank leader and nearly 1,000 delegates and observers to a union convention.
But while Bank of Canada governor Mark Carney received a standing ovation after his speech to the Canadian Auto Workers’ meeting in Toronto, he also left many disappointed Wednesday.
Carney’s prescription for Canada’s recovery — more trade deals with emerg- ing economies — did little to address the union members’ concerns about unemployment, freer trade and the high-flying dollar, some said after his speech.
“He didn’t mention dropping the dollar at all in his speech,” said John D’Agnolo, chairperson of Local 200. He represents the Ford truck engine plant in Windsor, which is set to lose about 400 jobs because the high dollar has made it less competitive with the U.S., he said.
In fact, Carney downplayed the dollar’s role in Canada’s poor export performance saying it accounts for just 20 per cent of the decline in sales to other countries
“It is not the most important reason,” Carney said, noting Canada’s heavy reliance on the struggling U.S. market is the main reason Canada’s export performance fell to second worst among the G-20 developed nations in the past decade.
While acknowledging the higher dollar has hit the auto sector particularly hard, he said the key to Canada’s future prosperity lies in boosting trade with other emerging economies, such as China and India.
But Canadian auto workers said they fear that will simply expose them to even more competition from low-wage workers.
“We’re not against free trade providing it’s reciprocal trade, dollar for dollar. The problem with establishing a free trade agreement with Korea, we know the barriers to selling our product in Korea will stay up,” CAW national president Ken Lewenza said after Carney’s speech.
Carney said in the new global economy, where manufacturers can move production to the lowestcost country, Canada’s best hope is to invest in education and training its workers to the highest possible level.
He cited the aerospace industry, where Canada enjoys a global competitive advantage in engineering and design.
Lewenza said he supports the idea of retraining, but he’s getting little help from Canadian employers who are sitting on half a billion dollars in cash, while laid-off workers like those from London’s ElectroMotive are struggling to find jobs.
Carney agreed at a press conference later that too many companies are sitting on “dead” money, and suggested corporations return the unused funds to shareholders if they’re not going to invest in growth. The CAW has complained the higher dollar is hurting its efforts to battle employers’ demands for lower wages.
The Detroit Three automakers opened this year’s contract negotiations saying they need more competitive labour costs in Canada.
“We’re being challenged like never before throughout manufacturing as a result of the Canadian dollar,” said Chris Buckley, chief negotiator for the CAW with GM Canada.
“The Canadian dollar makes our negotiations with GM, Chrysler and Ford extremely difficult.”
Carney’s appearance at the convention was a rare meeting of Bay St. and Main St. and it led to some surprising moments.
At one point, a fiery Lewenza said he would give Carney union cards for his four daughters to sign “because I believe every Canadian needs a union.”
Achuckling Carney agreed to have them do so.
Lewenza, who invited Carney to address the labour convention, said he saw it as an opportunity to raise the status of working men and women as equal partners in the future of the economy.
The bank said Carney accepted because he views it as part of the central bank’s role to meet with all segments of the economy, whether it’s business, academia or labour. With files from Laura Kane