Thank you for this opportunity.
I will divide my presentation into two parts: one, general context; two, the challenges we see as a union facing manufacturing and the solutions and ideas we have about how to deal with these challenges.
Let me start by sharing what Lina said. We think there is a crisis in the manufacturing sector. It's not simply some problems and some challenges. This crisis is affecting the economy in general and is also affecting the lives of people. Since 2004, almost a quarter of a million workers lost their jobs in manufacturing. If you look at the same period, 10% of the those declines were in Ontario and 14% in Quebec. Those are staggering numbers when you think that manufacturing employs almost two million workers in Canada.
The manufacturers association of Canada says it's not the union. It says that wages in the manufacturing sector are 28% higher than the average wage. That means we're not only losing jobs, but we are losing good jobs that pay taxes and help development in the communities. The manufacturers association of Canada said that for each dollar that is invested in manufacturing, it reproduces $3 in economic movement. That means we are losing a lot of money every time a plant closes, not only us, the workers in the community, but also the country.
The recent crisis is reflected, as has been mentioned, in loss of jobs, but it's also affecting the economy in general. And 2006 will be the first year in the history of Canada that the GDP of Ontario, the manufacturing heart of this country, will be lower than the GDP of the country. That is a clear example of how the loss of manufacturing is affecting the economy in Canada.
There is what I like to call a bunch of myths around manufacturing. Some people like to say that manufacturing is over for countries like Canada, that we have to move into the knowledge society, we have to start developing these new industries that are highly technological.
I want to share a bit of personal experience. I probably call Canada my home these days, but I grew up in another country. My accent has already probably told you that. The country where I grew up is Argentina, a country that for many, many years mirrored Canada in the type of country it was--the natural resources, the immigration flow, and the industrial development.
It started in the seventies, a very important movement started with the military taking shape and moving into democracy, with an economic policy quite similar to the one we see applied in Canada today. The government decided to move the economy from an industrial base to a resource base.
I won't spend a lot of time on what the resources were. I'm sure that all of you remember December of 2001, the people on the streets, and five presidents in less than a month. People were looking for jobs; they were looking for stability. People were looking for the country they used to have, but it was not there any more.
I'm here because I'm afraid that if we don't pay attention to manufacturing in Canada, we could see a similar kind of reaction, perhaps not in the whole country but in areas where people have grown used to having good jobs and good opportunities for their kids.
I live in Toronto, and for me, it's not magic that violence on the streets is growing and that gangs are forming. That is completely related to a lack of opportunities and a lack of hope. I want you to pay attention to that word, because people go through life with the hope of making something better of themselves and of making something better for their families.
When you are destroying good-paying jobs, jobs that give opportunity, when you see plants close and you see that your kids won't be able to get those good jobs, when you see communities like those in northern Ontario turning into ghost towns every day because pulp and paper mills are closing, then that hope slowly disappears and all other kinds of social diseases start to appear.
I want to move quickly into what we see as the challenges for the manufacturing sector. I want to mention five.
I will mention the high Canadian dollar. I want to talk about energy prices and opportunities. I want to talk about the lack of an industrial policy on the part of the government. I want to mention trade agreements and the lack of representation of workers in the communities in that area. Finally, as Mr. Vaudreuil mentioned, I want to talk about skills development and adjustments for workers in the manufacturing sector.
Very briefly, about the Canadian dollar, I don't need to tell you that the increase in the value of the Canadian dollar is hurting the manufacturing sector. When the dollar goes up, the products that are sold internationally go up in price, but those prices that are going up don't reflect in new profit or opportunities for the employers in the manufacturing sector.
Right now, we have the dollar almost at 90¢ or past 90¢, and there are a bunch of reasons why that has happened. Very important is the low value of the U.S. dollar. There are some things about which we can do nothing, but there are ways by which we can influence our dollar. One of them is the interest rate set by the Bank of Canada. The Bank of Canada is keeping interest rates at a rate considered to be effective to fight inflation, but that rate is keeping the Canadian dollar too high, and that is hurting manufacturing.
In our opinion, fighting inflation at this time, and gaining that fight, is fighting the wrong fight and gaining the wrong fight. At this point, we don't see a concern about inflation coming and affecting the economy of Canada, but, yes, we see a strong effect in manufacturing because of the value of the Canadian dollar. We think the Canadian government should influence the Bank of Canada as much as possible to ensure that the interest rate is possibly reduced or at least maintained, to at least support and sustain the maintenance and development of manufacturing in Canada.
The second area I want to mention is energy. The energy prices are hurting manufacturing, but also new technologies. Energy could be a great opportunity for manufacturing. We believe that a green industrial strategy is the way to go to resolve the energy crisis and resolve the price of energy, but also to improve development of manufacturing in Canada.
I don't know if you know that production of windmills in Germany is the second consumer of steel, after automobiles. Just that could give you an idea of what a green industrial strategy can do for Canada's manufacturing. Making windmills consumes almost as much steel in Germany as automobiles.
We are greatly displeased with the new policy put forward by the federal government, so we ask for the possibility of looking at energy and new energy technologies as an opportunity for manufacturing.
Lina already talked about skills development, and if there are any questions, I will go there later.
Finally I will mention the need for an industrial strategy. We believe that sectoral industrial strategies are the way to go. We don't believe that just general tax cuts are helping the economy. We believe tax cuts should be directed to research and development, investment in new plants, and investment in equipment, sector by sector. To serve as an example, there's the Canadian automobile partnership sector and the new Canadian steel partnership sector.
I will probably use my answers to questions to continue.