Mr. Speaker, I am pleased to participate in this discussion. It is important that I demonstrate the significance of the economic situation worldwide, and the automotive sector in particular and its impact, not only on the Canadian economy but on Cape Breton Island.
As we have seen in the throne speech, the Conservative government has not acted.
A recent article in the Globe and Mail demonstrated how all the other G20 countries are providing stimulus packages for their economies through infrastructure and also positioning their industries for this changing economy. Some of the other countries around the world putting packages together are Britain, Italy, the Scandinavian countries, China, Australia and the U.S..
Last week's Economist magazine stated:
On November 17th Harry Reid, the Senate majority leader, laid out plans for a $100 billion fiscal stimulus, which included a $25 billion car-industry bail-out, $38 billion for cash-strapped state governments, an estimated $6.5 billion to boost unemployment benefits and $13.5 billion to fund infrastructure improvements.
In that same article, President-elect Barack Obama proposed a tax credit for businesses that hire new workers and a relaxation of penalties for withdrawing money from retirement accounts. Mr. Obama's stimulus package adds up to over $175 billion over two years, and that is just right now.
Some are even looking at bigger options. Many of the investments will go into the green economy, such as projects to improve energy efficiency.
The Canadian economy is about one-tenth the size of the U.S. economy but our treasury is in a much better financial situation. As stated, the U.S. could spend $175 billion up to $200 billion in its stimulus package. Why could the Canadian government not come forward with its own stimulus package to boost our economy and help the industries that are having problems?
We have heard talk about our coalition. Our coalition has a plan. We are talking about providing up to $30 billion for projects to help the economy. If we do not do this and other countries are, where will our industries go? What will happen to the people who are unemployed?
One can just think of all the infrastructure projects that could be done across this whole country, from British Columbia to Newfoundland and Labrador. Much of our infrastructure is in disrepair and so much of it is needed for the new economy.
When I look at my own riding of Sydney--Victoria, I see the need for investments in sewage and water systems and harbour and wharf improvements. The marine Atlantic ferry system alone could use a tremendous amount of money for infrastructure. We also need highway improvements.
As many of my colleagues in the House and many international travellers know, the Cabot Trail is one of the most scenic drives in the world but it is in desperate need of repair. A new infrastructure package could help projects like that and could help spur the economy in those outer regions.
The most important missing component from the Conservative's economic update is the lack of money to help the auto industry. Every day, plants are closing and people are getting laid off. Business articles in all the newspapers state how far it could go without a package being announced. We are not talking about a package to help inefficient industries or industries that are not thinking of the new economy, to help with fuel efficiencies. We are talking about industries that will step up to the plate, but these industries need help.
As I stated, other countries are stepping up to the plate and investing in their automotive industries but this country is not and that is because of the inaction of the Conservative government.
The broad-based implications of this industry's failing is enormous. Even the so-called big three have a network of dealerships throughout the country that rely on their products. They have sales staff and administrative staff. They have mechanics. As well, auto dealerships do a significant amount of spending locally whether it is through advertising or helping with charitable events. In short, there is a barely a riding in this country that is not affected by the auto industry.
We are talking about manufacturing. That is key and that has to be fixed. It is not just the auto makers. It is the people who make the parts for these automobiles. As has been stated many times, many of the parts that are made in Canada go to the United States and other countries. If we are not producing those products, somebody else will produce them.
I want to talk specifically about the jobs in my riding of Sydney—Victoria. Many of the jobs rely on the auto sector. I have mentioned this previously in the House. I asked the Minister of Finance and the Minister of Industry about it. My colleague from Parkdale—High Park asked a question in the House on Friday to try to get some action from the government. He did not get any answers. He did not get any action. That is not surprising.
My hon. colleague from Cape Breton—Canso will remember that 15 years ago Frank Stronach visited Cape Breton. He was asked if Magna could succeed at opening a plant in Cape Breton on the other side of the country far away from Ontario. He said that if the infrastructure and workforce were there, he could succeed anywhere.
He invested in Cape Breton. He built one plant and after a few years he saw how good the workforce was. He saw the quality of the products. He saw the transportation links working. What did he do? He built a second plant. He built two plants in Cape Breton. After those two plants were built, a third plant was built by another company, Cape Breton Castings. That company built parts to supply the other two automotive parts plants.
When we look at the full capacity of these three plants, it is up to 400 workers in an area like Cape Breton. That is a major impact. It might not sound like a big impact in the Ohio region or central Canada but it is a big deal in Cape Breton. Magna PFC and Atlantic Castings employ several people in the Northside industrial park.
It is a tremendous impact on an area like Cape Breton. These are solid jobs requiring technical skills. They are the kind of jobs which before the downturn were in considerable demand.
Not only are these hundreds of direct jobs at stake, but there are hundreds more in services that will be placed in jeopardy. This morning I was listening to an item on CBC. A Canadian auto workers president, I think from Windsor, was talking about the auto sector in Canada. It is directly or indirectly responsible for one out of seven jobs in Canada. There is the multiplying factor. How much of a spinoff is there from one job in the automotive industry? He was using the number eight. For every person who is hired in one of these plants, there are eight others who are feeding from it. They could be truck drivers or people who are painting the building.
People living in a community that has an automotive plant see it around them. That is why in Cape Breton right now there is a major concern. There have been some layoffs and there might be more to come because there is no package in place.
These jobs have a tremendous impact on a region. It is phenomenal. When there are other countries helping their industries and we are not helping ours, where do we think they are going to go? These are international industries.
I would like to talk about Cape Breton. Over the last number of years we have seen positive developments in Cape Breton. It still has a fairly high unemployment rate when we look at the whole country. Right now we are at 12%. Before my hon. colleague from Cape Breton—Canso and I were elected, the unemployment rate was up to 20%.
Our industries were different ones. We had the coal industry. There is a large coal bed off Cape Breton. This created a steel industry. During World War II Cape Breton produced over 40% of the whole country's coal and steel. That is how much of an impact there was in Cape Breton, with just those two industries. We also had the groundfish industry. With the collapse of the cod fishery, it also took a major hit. In a matter of a few years, around the year 2000, those three industries collapsed in Cape Breton. That is why it drove the unemployment rate up to 20%.
Many good things have happened in Cape Breton. Our tourist industry has been increasing, with the famous Celtic Colours. There are a lot of people who went through a transition and are working out west right now and bringing money back home.
The automotive sector was very important, not only for the spinoffs but for the emotional and psychological impact on our region to see plants opening, to see men and women going back to work, to see that spinoff and the awards these plants got compared to other plants, for their productivity and their excellence.
We got through it. These new industries came. We are willing to expand on these industries. Many stakeholders in the community stepped up to the plate, invested and got training to help with this industry. We need more help like that.
Part of the change we are going through in this industry will require innovation. That includes innovation coming from the parts industry, no matter where the companies are located in the country. There has to be innovation for the new vehicles.
We have a skilled workforce and we have the technical expertise. What we need is a government that will spur innovation and allow Atlantic Castings and Magna of Cape Breton to participate in the economic recovery and allow plants right across the country to operate.
We do not have that in place. Like I said before, where are they going to go? We need a package that will help rationalize existing operations instead of slashing production. When we think of the finances across the whole supply chain in the automotive sector, when big companies like GM, Chrysler and Ford get into a cash-strapped situation, the people who get hurt the most, the plants that get hurt the most are the ones that are supplying those operations. Those are the ones who are going to get hurt the most. We have to help those operations.
I had a meeting this weekend with the councillors and mayor of my region. They do not think there should be a buyout, that we should give money to these companies just to get them through the financial crisis. They believe that we have to make money available that will help them be better positioned for the new economy.
Part of that change will require innovation. It includes innovation for the parts industry also. We have the skills right across the country. We need a package that will help rationalize these operations.
The government has to act. Every day is a day we are losing. Every day represents another plant that is gone. Every day there are people losing their jobs. When this equipment leaves a community, when it leaves that plant, it is not coming back. The clock is ticking. Workers are getting laid off. It does not have to be this way.
I stated that on this side we are willing to put a stimulus package in place to help these industries. Just think about the infrastructure alone. Even the right-wing governments of the world are putting money there. It is hard to believe. China is putting a lot of money into infrastructure, as is the U.S. What is going on elsewhere is phenomenal, but no, the government sits there and says, “Let the market help the workers who are unemployed. Let the market help the automotive plants”. Is the market going to help with the infrastructure? I doubt it.
There was no package announced by the Conservative government in its economic update last week. Like I said, the companies in the automotive sector are internationally based. They will be looking seriously at other countries that will help them through these very troubling and challenging times.
This is a spell we are going through. We went through it before. It is a spell in the industry. Yes, people worldwide will buy fewer cars in the upcoming months. They might fix up their old ones for a while, but eventually it is going to come around.
When we look at the predictions from the economists and specialists who know how the industry works, they see technically an increase in the buying of automobiles in the upcoming years. It is going to happen. Vehicles are going to be bought. Vehicles are going to be traded in. The emerging economies alone, China, India and Indonesia, are all buying more vehicles. Yes, they will have a downturn in their economies, but they are going to buy more vehicles.
Who is going to produce those vehicles? Who is going to sell those vehicles? Who is going to manufacture the parts for those vehicles? We can do that right here in Canada. We have proven it over the last 20 years and we can do it again, but we need help right now. We need to help these plants retool. We need to help the workers. We need to make sure that EI is available when they are going through down times. We should be educating the workers on the new technologies. We are ready.
We have a good business environment in this country. Our corporate tax rates are down. We have a great health system. When we look at the cost of producing a vehicle here in Canada compared to other countries, we have one of the best packages available because of our health system.
The sad reality is that if we wait a month, six weeks, two months for any substantial package, think of how many jobs we could be losing. There is a domino effect. There are plants in Scarborough, Oshawa, Windsor, Guelph, Oakville. There are plants all over and they need parts, but when these plants close, they do not buy parts. The parts stop coming in.
They need us in Cape Breton to produce parts for them and we need them to stay open. It has to be a package that is going to help the whole supply chain. It has to be a package that is going to help this industry be ready for this century. Imagine the fuel efficient cars and lighter vehicles that we could be building. There is no doubt that we could be a world leader, but again the government has not acted.
I stand here proud to be the member for Sydney—Victoria. I am very appreciative that Frank Stronach came to Cape Breton that day, opened that plant and took a chance on us in Cape Breton and we hope that plant will stay. We know the three major auto manufacturers need help. There are other plants, not only the big three, making cars in Canada and we should be helping them also. We should have a good, lean manufacturing industry that is suitable for this century.
In closing, I would like to thank my hon. colleagues for listening today to the hardships we have had in Cape Breton and how we have moved over the last few years and where we are going.