Sun, January 29, 2006
By ROMINA MAURINO | Calgary Sun
TORONTO (CP) - Canadian companies in the auto assembly, heavy equipment, pork processing and pulp and paper sectors have announced more than 2,300 job cuts in the last week alone, continuing a wave that has battered the blue-collar workforce.
Manufacturing workers will continue to take hits in the coming year - with possibly another 100,000 lost jobs - unless Canada changes its trade policies, critics say.
The high loonie, rising energy prices and increasing competition from China and other low-wage countries have weakened the manufacturing industry, leading to the loss of 112,000 jobs in two years, primarily in the auto, forestry, aerospace, textile and industrial products sectors.
But rather than making plans to help struggling companies, critics say, Canada is supplying raw materials to the United States and allowing China to sell endless quantities of goods without buying much back.
"With some of our resource exports, especially in energy, we are managing to single-handedly put a crimp in our manufacturing industries because of the lack of thought and strategizing about the best interests of Canada," says Keith Newman, research director at the Communications, Energy and Paperworkers Union.
"No other country in the position of Canada would do what we're doing."
A week ago, Ford Motor Co. (NYSE:F) announced 1,200 jobs will be cut its assembly plant in St. Thomas, Ont. On Thursday, tractor giant John Deere said it will close a harvesting equipment factory in Woodstock, Ont., with the loss of 325 jobs, and paper maker Bowater said it will close a shut a 280-job mill in Thunder Bay, Ont.
On Friday, meat processor Olymel said it will shut pork-cutting operations in Saint-Simon, Que., affecting 525 workers, and Industrialex Manufacturing Canada (TSXV:IXC.U) announced the closure of its Windsor plant, which employed about 50 people.
Last year, forestry companies including Domtar, Cascades, Abitibi-Consolidated and Weyerhaeuser - along with auto giant General Motors Corp. - announced thousands of job cuts, many in Ontario.
Overall, the manufacturing cuts are offset by growth in other sectors - especially oil and gas in Western Canada, which is luring many Canadians from the East. Financial services, retail, health care and education are all growing as well.
In addition, industrial giants such as Toyota are expanding, creating job opportunities for laid-off people in Woodstock, for example.
Economists believe a lot of Canada's lost manufacturing jobs will go to China or other low-wage countries such as Mexico, while some companies will consolidate operations in the United States.
Jim Stanford, an economist with the Canadian Auto Workers, expects the manufacturing sector to lose 100,000 jobs in 2006.
"Canadian workers get the downside of globalization but none of the upside," he said.
"Companies will try to do what they can, and the things that make the most sense are investing in more equipment and new technology and trying to make their operations fundamentally more efficient - rather than trying to squeeze the workers that much more," Stanford said.
But without changes to trade and exchange rate policies, he added individual company initiatives "are like spitting in the wind."
CIBC World Markets economist Benjamin Tal says barriers to trade with China are unlikely, because "the momentum is there and it would be very difficult to stop."
He said the outlook for manufacturing is bleak despite an unemployment rate at its lowest level in decades at 6.4 per cent.
A lot of the jobs being created, he says, are "low-quality" service sector jobs, and one-third involve self-employment.
There is also evidence of older men dropping out of the workforce altogether after losing their jobs.
Some laid-off workers, says CEP president Brian Payne, have found work in the Alberta oilsands.
"Alberta is the Klondike of modern-day Canada, so there's certainly job opportunities there," he said. "But it's not a particularly good thing to have everybody move from one part of Canada to another." (*)
