Yesterday, I wrote a blog post highlighting Andrew Coyne and his column in the National Post that proved that Caterpillar’s Electro-Motive Diesel (EMD) plant in London, Ontario had NOT received tax credits or tax subsidies from Prime Minister Harper and his Conservative Government. It also proved that Caterpillar, with its many subsidiaries, is an American company that has taken nothing from Canada or Canadian workers or taxpayers, be it technology or equipment.
Now today, we have Mike Moffatt, a chemical industry consultant and lecturer at the Richard Ivey School of Business (which is located at University of Western Ontario), with an article in the Globe and Mail confirming what Coyne wrote but in terms of the whole idea of subsidies being nothing more than a “myth” — a nice way of pointing out what was a “lie.” For example, Moffatt writes:
“If this $5-million is seen as a subsidy, we should not see it as one that went to Electro-Motive Diesel, for two reasons:
1. The benefits of the $5-million were split between the purchasers of locomotives and the manufacturers.
2. The benefits that went to manufacturers went to all manufacturers, regardless of their location. If a Canadian company bought a locomotive from the GE plant in Erie, Pa., they were eligible for the higher CCA rate. Much of this subsidy, in fact, would have gone to locomotives produced outside of Canada, as Electro-Motive has only a 30 per cent North American market share in diesel locomotives.
The notion that Electro-Motive was given a $5-million tax break or subsidy to create jobs in Canada simply does not hold up to scrutiny. We need to put this myth to rest.”
But, the Globe goes even further by posting a column by William Polushin, founding director of the McGill International Competitiveness Program. In Polushin’s first paragraph, he points out that:
“Caterpillar’s decision to close its Electro-Motive Diesel facility in London has generated a wide range of responses and opinions. Caterpillar’s actions are distasteful and unfortunate, but there is a need in Canada for a serious reality check in our country about what it means to live in an increasingly integrated and competitive global economy.”
Whatever the case, the CAW and other private sector unions need to wake up to the reality of the unsustainability of union wages and entitlements versus the global economy and competition if they don’t want businesses, in similar or other sectors, moving away from Ontario or other parts of Canada. It’s all about profit. If Ontario is not open for business and they can’t make the profit they need to make, they will simply go elsewhere.
In any event, since EMD/Catepillar did not receive a cent from the Canadian taxpayer, what this all comes down to anti-Conservative government hysteria. Day in and day out, the federal opposition parties hysterically cry wolf, usually confirmed by the Toronto Star, CTV and CBC, with the result that those particular media sources no longer have credibility about anything.
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