The Commerce Times

Where Canada stands

Jim Stanford sits among Buzz Hargrove (left) and Elizabeth May (right). Courtesy of Anthony Damtsis

December 1, 2009 0 | By Michael Chu

Jim Stanford, the colourful yet well-spoken economist for the Canadian Auto Workers union, took some time out of his day at the Manufacturing Conference at Ryerson this November to share his thoughts on some of the most pressing concerns facing the Canadian economy.  Stanford was concerned about issues including Canada’s dependence on resource extraction, Canada’s inability to innovate, identifying future opportunities and the relevance of unions.

Harold Innis’ Staple Thesis, a theory of Canadian economic development, has continued to be relevant today.  But what can Canada do to move away from this?
Innis would be rolling over in his grave to see what’s happening to us.  He warned us 70 years ago about the dangers of putting all of our eggs in one basket when digging resources out of the ground and selling them to others.  It means our economy is stunted, undiversified, fragile and dependent on decisions made in other countries.  For some decades after the Second World War we made some considerable progress from the Staples Thesis trap.  Proactive measures were put in place such as the autopact, which built our auto industry or strategies to develop aerospace of telecommunications and we became a leader, not because we are naturally good at it, but because we had policies in place that made sense.
That changed with the ratification of NAFTA in 1989. We assumed that free trade would make us better, and what free trade has done is powerful.  Market forces are pushing us back towards becoming a specialist in resource extraction.  Now, there is considerable income, some jobs and certainly some profits that come with that.  The minerals and petroleum industries have been unbelievably profitable.
There are enormous risks as well; both environmental and economic.  We are missing out on the potential for value-added production.

Do you think Canada is doing enough to identify alternative energies as a true potential growth sector?
No, we aren’t doing enough.  It partly has to do with an invested interest in the tar sands industry and known companies that are making unbelievable profit.  Even the most timid suggestions get met with such an onslaught, a barrage of outrage from the oil industry.  An economic report released by TD bank showed how we could meet emission targets in the future that would require less oil sands.  You saw it almost like a witch-hunt from the oil industry, from Alberta politicians, and federal government leaders, like environment minister Jim Prentice, trying to denounce it as if it was fantasy.  They are the ones  in a fantasy world if they think, whether environmentally or economically, we can continue as a country to just scrape tar out of the ground to pay our way in the world.

How relevant are unions in today’s manufacturing climate?
Unions have a crucial role to play in revitalizing and restructuring the industry.  Also, in trying to make sure the industry follows behind value constructive approaches to the future rather than just trying to drive everything down into the ground.  It’s very tempting for an employer to say, “Wow, I’m in a really tough situation.  I’m going to cut wages.”  That’s not going to do you any good at all in the long run, because someone else will cut their wages even more.  The only way to build an industry as Jay Myers said, is to be innovative, high value, create new products, new processes and labour.  I think we’ve done that very well in Canada’s auto industry, which faced a do-or-die crisis over the last year.  We absolutely were part of the solution.  Not just by negotiating contract changes but more importantly by positioning Canadian plants to share in the rebound with some of the new policies that were put in place.