Hudak is right, McGuinty’s Ontario is closed to business

Today, Ontario PC Leader Tim Hudak is telling Ontarians that if industries like Caterpillar are leaving, they should stop blaming Caterpillar and the federal government and look no further than the policies of the McGuinty Liberal government. The message is loud and clear: Ontario is closed to business and investment. As the Toronto Sun’s Jonathan Jenkins writes:

“Hudak said he expects ‘the argument from the left’ in advance of the provincial budget to be that Ontario has done enough to lower its corporate tax rates and the province can afford to hold them where they are in the face of a hefty deficit and ungrateful multinationals such as Caterpillar. But that would be a mistake, the Tory leader said, arguing lowering taxes and regulatory burdens are the only way to attract job-creating investment.”

Right on! During the 1995-1999 period, the Mike Harris government provided precisely the conditions Hudak is talking about, a period when 700,000 full-time good paying jobs were created.

However, it is even more important to be flexible in today’s global economy. Refusing to consider taking a salary cut of 50% (for some of the Caterpillar jobs although not all) in Ontario is being looked upon as a potential blessing for Muncie, Indiana.   For example, read the final paragraph in this Huffington Post article from January 19th, 2012:

“In Muncie, where the official unemployment rate is around 10 percent and the unofficial rate hovers near 20, the jobs would be welcomed, even if they came with low wages and slim benefits, according to the city’s mayor. Formerly an industrial center, Muncie has lost over 10,000 manufacturing jobs in the past 15 years.

‘I sympathize with everything that’s going on with the workers in Canada and support their struggles for inequality,’ said Mayor Dennis Tyler. ‘But the truth of the matter is that it is the corporations, at the end of the day, that are going to make the decision. And we’ve got over 4,000 abandoned homes here and people that need to go to work.'”

Truth is, Caterpillar has not only been cutting back salaries for hourly workers in Ontario. Check out this piece from 2008 when Caterpillar was cutting white-collar salaries in Washington by — wait for it — 50%. The reality is, as the mayor of Muncie says, private corporations have to do what they have to do — which is to make a profit.

And, let’s not forget, even non-profits make a profit. They simply deal with their profits differently by putting their profits back into the organization through salary increases, more services, embarking on capital projects, whatever. In other words, a pay check is every worker’s profit. In other words, profit is not a dirty word.

Anyway, back to Ontario. A google search will find McGuinty (and the Toronto Star) blaming the federal government for the Caterpiller closure, ostensibly because the federal government gave tax breaks that Caterpillar might have benefited from — which some feel they should have to pay back. And, McGuinty apparently feels foreign investment laws are not tough enough.

Well, as Paul says at the CAW Worker: “Tim Harper [at the Star] thinks Caterpillar should pay back tax breaks, all the while being too stupid to realize the tax incentives went to companies purchasing rail machinery, like CN, and were anounced in 2008, two years before Caterpillar bought EMD.” Paul also wonders, rightly,why did the Star not complain about similar breaks for Bombardier under former Liberal PMs Jean Chretien and Paul Martin?  

Look, no one likes the idea that several hundred workers in London are now out of jobs. But, why did the CAW not give their members a vote? Maybe some workers would have preferred $16.00 an hour over $0 dollars an hour. In time, if production increased, there likely would have been increases.  Then, there is the issue of what Caterpillar management has had to deal with regarding unions in the past. Read, for example, what CAW Worker has to say about that topic — as well as Bill M. at the MiltonConservative blog.

One thing is clear: Caterpillar is only the beginning. You can’t be in a global economy and expect wages and benefits to stay the same. Ask the citizens of many European countries about that.

So, Hudak is right on. The McGuinty government needs to put policies in place that create the conditions so that businesses will invest in Ontario — as opposed to making laws that discourage such investment. And private sector unions need to do more to help them stay in Ontario once they are here even if that means making significant concessions.

And, having the CAW consider “occupying” the Caterpillar factory is certainly not going to be helpful either. Civil disobedience? Confrontation? Making entitlement demands?

Sheesh! Greece anyone?

Note: Paragraph 7 revised shortly after publishing, for clarification purposes, to include quote from CAW Worker’s blog.


21 thoughts on “Hudak is right, McGuinty’s Ontario is closed to business

  1. The feds didn’t give the tax breaks to Caterpillar they gave them to their customers and were in place before Cat bought the company.


  2. Thanks for that Pissedoff. Yes, CAW Worker covers that nicely. But, if you have a link, just drop it here. In the meantime, I’ll revise that one sentence to be clearer.


  3. Here is the quote I have added from the CAW Worker’s post to clarify what Pissedoff said. “Tim Harper [at the Star] thinks Caterpillar should pay back tax breaks, all the while being too stupid to realize the tax incentives went to companies purchasing rail machinery, like CN, and were anounced in 2008, two years before Caterpillar bought EMD.”


  4. All we can see is the vicious, cruel face of capitalism at its worst. We can join the “race to the bottom” and have a standard of living like Mexico very soon or we can educate our way to a “silicon valley” type economy as many smart nations are doing.

    Lucky for Canada, the Caterpillars of the world cannot move the oil, the potash, the trees, the minerals, etc that our floating our economy right now.


  5. Well Doug, we also see the vicious face of entitlement and socialism. No economic system is perfect, but communism and socialism doesn’t work in the long term. Yes, there are horrendous capitalist abuses but most of the time, people live productive lives in productive jobs. It’s just that employers can no longer afford all the benefits and entitlements being demanded. And, even if corporations make huge profits, so what, it goes to shareholders and research and development which is then put back into the economy.

    On this topic, you and I disagree vehemently.


  6. “Back in March of 2008, Prime Minister Stephen Harper visited the Oxford Street plant to highlight a $5 million federal tax break for buyers of the diesel locomotive-makers products and a wider $1 billion tax break on industrial capital investments. It’s because of these levies, Rae said the federal government should be getting involved in the lockout that started New Year’s Day”


  7. Pissedoff at 4:56pm. I understood the issue, thanks. I revised my paragraph on the tax credits because, you were right, and I didn’t think I had been clear enough. But, no, I hadn’t noticed your comment there but Paul covered the topic very well, as usual. 😉


  8. Sandy said ” On this topic, you are I disagree vehemently.”

    Quite right … many on the left constantly criticize “evil” companies about profits. In the case of EMD , so Caterpillar made a profit , does the left expect Caterpillar to run EMD at a loss … it seems so by their perverted reasoning.

    I recently saw an email circulating ranting about the cost of drugs.I certainly am not trying to defend the drug companies , but the article didn’t list the development , regulatory testing , marketing and ongoing Q/A (quality) costs … typically $300 million+ for a new drug.

    So assume the evil drug company spends $300 million to develop a new drug , if they sell 300,000,000 pills at $1 each they break even … see how long the evil company stays in that business.


  9. Thanks for that link Pissedoff. Perhaps readers can comment.

    I believe Paul at CAW Worker is right. Those kinds of tax breaks were made during the Chretien and Martin years, even for work done outside Canada. Yet, few of the same folks were complaining then. Point is, no government leader can read the future and capital will flee, unfortunately. My point,however, is no country can survive long, or with an engaged and motivated work force, when there is primarily a public sector creating the jobs.

    In any event, governments don’t create jobs; rather they create the policies and conditions for investment and jobs. Unless of course, the jobs are in the public sector.

    Think about the incentives and subsidies McGuinty has been putting into green energy — money down the drain. Rae should worry about that too.


  10. I have received feedback that people cannot post comments on my site. I don’t know why but I will change the current theme to a trial one to see if that helps the situation. In the meantime, I’ll contact support.


  11. All this fire breathing commentary from the left-wing politician’s, media and unions that is being spewed at Caterpillar and, by extension, all manufacturers and business, is absolutely toxic for the economy. It actually makes it easier for businesses to make the hard decision to pull up stakes and move somewhere a little more hospitable. After all, it’s pretty obvious that they are hated and despised. Same goes for businesses that are thinking about setting up in Ontario.
    How can these characters not see that? They are blinded by their ideology.
    They know not what they do.


  12. The hypocrisey of the CAW knows no bounds. They bleat publically about how Caterpillar are such bullies. Here in Port Elgin On. the CAW have placed a $2 million wind turbine at their Family Education Centre. Against the communities objection, they’ve decided to steamroll ahead with the placement of their turbine that goes against all health and safety regulations for the turbine.
    What the hell are the CAW doing blowing $2 million dues money on this and more on other “social” programs and why this money isn’t going to retaining jobs and why are they behaving privately what they’re railing against publically?
    Also know that the CAW has a Feed in Tarriff contract so they’ll have their grubby mitts in the Ontario taxpayers wallet for 20 years. I guess the 6 Billion bailout just wasn’t enough


  13. Paul K. I would recommend readers check out your blog about the wind turbine problem in Port Elgin. They need only click on your name. www.
    What an eye and ear full. I live in the Niagara area and there are fans in the vineyards. They are diesel powered but only used in the fall when there is danger of frost prior to harvest. And, I know what they sound like. If they are run at night, we get very little if any sleep. How much worse 24/7 or close to that and a much higher pitch. Anyway, keep up the good work.


  14. Pingback: Sandy: Andrew Coyne on the truth about EDM & Caterpillar | Jack's Newswatch

  15. Harper it seems wants to “beat our plowshares into swords” a war economy is a highly inefficient economy. There is almost no worse way to spend the money.

    Spending the same dollar on infrastructure (roads, bridges, airports, harbours, schools, hospitals…) generates far more jobs at the same expenditure level than tax cuts or war spending.


  16. Doug — You keep doing it. No matter what I write, you leave a comment that is anti-Harper whatever. Sorry, but I’m just not going to approve any more because they don’t add anything to the discussion. This post, by the way, was about Hudak, McGuinty and Ontario going to pot because of bad policies and union intransigence.


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