Mr. Speaker, I will be sharing my time with the member for Winnipeg North.
Mr. Speaker, I want to congratulate you on your appointment to the chair. I know you had a campaign for Speaker and now you have been ably selected.
Although I have spoken in the House of Commons a number of times on different issues, it is the first time I have had a chance to give a speech. I will begin by thanking the residents of Windsor West for re-electing me. It is an honour and a privilege to serve in the House and I thank them for their confidence. I also want to thank the volunteers and the many people who gave up their time to ensure the campaign was successful.
I particularly want to thank my family, my wife, Terry, my daughter, Alexandria, and my son, Wade who I miss every day but I know that the work we do in the House of Commons can make a difference for their future.
One of the things I want to focus on in terms of my speech is the fiscal update. It was disconcerting, when the update came forward, to see the lack of action on a stimulus package and the lack of commitment for the government to do so.
In particular, the auto sector in my region has been struggling for a number of years and we have been seeking solutions for reinventing the industry in many respects. Over five years ago we put together a green car strategy with Greenpeace and the CAW to look at modernizing the auto industry, ensure we would protect jobs and that we would environmentally improve not only the emissions but also the way we design and make the vehicles.
It is important to note that there have been those who have described the current condition of the auto industry as one where we need to work toward a bailout. I would counter that with regard to history. History has shown that in the past when there has been support for restructuring, for example Chrysler, the United States was very assertive, as was Canada, in providing leadership. From that, if we look at a plant like mine inWindsor West where it produces the minivan, it has been doing that for 25 years now because of that commitment. What happened is that taxpayer money that went into providing credit at that time, a dividend was paid back to them. The taxpayers of Ontario and of the United States actually reaped millions of dollars as the company bought shares back.
That is important to note because it is not about providing a blank cheque, as those who have made innuendo that would see this diminished opportunity.
Canada is totally different from the United States. Last year in the United States they moved rapidly. They worked together on an energy bill that contained $25 billion for the auto industry in the United States to move it to new technologies, greener technologies. There also has been political support to say that they want to save their industry. It has been very overt there, whereas here we have been very passive and having to catch up.
If we compare that American $25 billion set aside for loans and other types of research and development and we look at the Conservative government's last budget, the Conservatives actually cut money from the auto industry. They had the ecoAUTO rebate program which was a terrible program. When it was put in place they actually subsidized vehicles made in Japan, Korea and other parts of the world. Our taxpayer dollars went out to those other production facilities as purchasing of those models.
Instead of reinvesting that money, the government decided to cut that outright. What it kept was the tax on the auto industry which it rolled into a $50 million a year fund, for $250 million over five years.
We can see the big difference of what was happening in United States versus what was happening here in Canada.
Likewise, we know that when the U.S. automakers went to Washington it was a debacle. They should have, and rightly so, gone to the table with a proper plan but they did not have that and were reprimanded for that. However, there was a clear signal there that they would be drawn back because the workers' interests were more important.
It is not the fault of auto workers in this country because the management did not move quicker to greener technologies, nor is it their fault about the liquidity problem the United States has been facing.
During the election, the Prime Minister explicitly said that we did not have the same problems here and that we did not have the same housing issues. In fact, we saw housing properties drop in my riding during that time, so he was wrong again. What the Conservatives failed to tell Canadians is that 85% of our auto sales go to the United States. When the United States has a crisis there needs to be action here when we have that type of connection to its market and its economy. The consequences are obvious as we have seen the market dry up.
What did the government do? It provided billions of dollars in support to the Canadian banking industry but did nothing for our automotive sector. It is interesting to note that the interest savings that should have been passed on were never passed on.
Let me give an example of where we could have seen some better muscling in of the industry. A good example is with respect to interest rates. We did nothing with conditions of interest rates.
Let me talk about my bank. I am offended with TD Canada Trust right now and if it were not for the good service provided by the people in the bank I would leave that banking institution. It provides car loans at 4% above prime. It will make more money on a car as it is financed through the system. Some credit unions have car loans at prime or prime plus 1%. This rate lessens the cost for the consumer and also ensures that a bank's profits are not a priority. The priority should be the workers and the companies so they can be profitable.
There has been no discussion about some of the facts regarding investment in this industry as it affects the Canadian economy. I want to highlight a couple of important things, especially when it comes to innovation.
The industry has invested more than $35 billion in Canada over the past decade which accounts for more than 17% of overall manufacturing investment. We did a study in the industry committee and one of the things that was obvious was that the oil and gas sector, which seems to get the lion's share of attention and support from the government, put less than 1% of its money back into research and development in Canada. The money is basically sucked out of this area and it does not come back to us.
R and D in Canada is already low compared to other industrial states. Canada is around 8% but it should be higher. However, when we look at the oil and gas sector, it is abysmal and yet it continues to get the support of the government. This is the time when we should be reinvesting in those sectors that have had some trouble, not always through the fault of their own and not through the fault of the worker, and that is important to note.
The Minister of Industry, along with others, have made several comments about auto workers. In trying to negotiate with the CAW, the industry minister was basically trying to negotiate through the media instead of sitting down and meeting with the CAW and its leadership. They waited for a number of days for a response to their letter but the minister never responded. He instead went public demanding that the CAW to do its part.
I want to correct the record so that people know that the CAW has been doing its part and is willing to do its part. It has shown a lot of progressive work that has landed this investment here.
We do know that auto wages are 50% higher than the Canadian average but they have nothing to apologize for. Productivity is even higher. It is a $300,000 value in productivity added per worker, which is four times the Canadian average. The workers know they need to be productive onsite. They have actually lowered their per vehicle hour assembly rate so it is even lower than some of the offshore auto market suppliers, such as Toyota and others. Our workers have been able to reduce their auto assembly hours, whereas Toyota's hours and costs have gone up.
Real wages in the auto sector are falling. Labour costs are approximately 7% of the total auto assembly cost, which is actually low. Wages are higher in Germany and Japan. It is not that auto workers here are in a different situation. It is simply that auto workers in Germany and Japan get paid more.
It is important to recognize that the big three auto companies and their unions have already come to the table with $900 million worth of savings through restructuring and by changing their agreements. They are doing their part today for the economy. What is missing is the fact that the federal government has not done its part. There is no national auto strategy and no sectoral strategy. There is only a corporate tax cut that does not help the auto sector because it is not making money right now.
On top of that, the government is phasing out the capital cost reduction allowance. It is going to reintroduce a tax on the auto industry, and that is unacceptable. We have men and women who are the best in the world and, through no fault of their own, they are unemployed. It is time for a national auto strategy and the time is now.
