A tough but perhaps telling comparison of neighbouring economies as GM pulls out of Massena, NY about two hours to the east but plans to expand in Niagara Falls, Ontario about the same distance as the crow flies to the west. The two plans are not related directly but we often assume that Canada is not in a competitive position in these sorts of things. But it takes doing as grannie might have said:
At GM's massive assembly operations in Oshawa, workers agreed to outsource janitorial operations and eliminate an in-house construction crew in order to win investment. The Ontario and federal governments also backstopped the plan by providing $435-million (Canadian) for the project, which included investments at other GM operations in Ontario and several research and development projects at universities throughout the country.Tough decisions in a shakey market. But at least get the spelling right, wouldja.
Comments
Hans - May 17, 2007 9:07 AM
"The Ontario and federal governments also backstopped the plan by providing $435-million (Canadian) for the project...."
I wish all the people who complain about the Maritime provinces' being supported by the rest of the Canada would observe this case which is but one example of Corporate Welfare for Upper Canadians.
Alan - May 17, 2007 9:51 AM
You are not suggesting that a similar or even pro-rated amount spent in PEI would trigger economic return would you?
Hans - May 17, 2007 1:09 PM
I was more hinting at that some Upper Canadian reactions I have encountered in the past in relation to government hand-outs seem to be based on a regional bias rather than a philosophical position against corporate welfare.
That being said, I would guess that a pro-rated amount (based on population?) would result in an economic return of pro-rated proportions.
Alan - May 17, 2007 2:23 PM
See, I can only fall back on the current economic model whereby those people in Niagara Falls work twelve months a year to pay into a system that supports those in jurisdictions whose politicans invest heavily in "seasonal" economies. I do not see the situation being pro-ratable or even reciprocal.
Hans - May 17, 2007 4:43 PM
I am referring to Govt. handouts propping up industries: E.g. Call centres in PEI vs. Car plants in Ontario. I gather you are bringing the issue of Employment Insurance and seasonal jobs into the equation.
Alan - May 17, 2007 4:58 PM
Well, I was pointing out that car plants in Ontario generate so much more total revenue that total expenses (including all subsidies) that they generate the capacity to support non-profitable industriousness-like exercises elsewhere. Accordingly, they would be considered a good investment and not welfare - especially compared to other furnaces of regional economic stability like the plant in Massena, NY. I consider "corporate welfare" to be the support of otherwise unprofitable businesses like the amalgamation of PEI seafood processors, what, almost ten years ago now? Same goes for Sysco, or a northern Ontario mining town that has run out of ore so I am not being mean or picking on PEI or anything. Remember, these profitable firms turn around and also are forced to reinvest into the location not just through wages but through things like municipal taxation and development charges which are used to build common infrastructures. If that is the case, is it not just priming the pump? Not bad as long as one knows there is water in the well.