Coping with change

Clearly, North America is sliding into a business recession, but its dimensions now cannot be determined. In view of the speculative excesses of the past decade, it could be severe. Therefore, it is important that we in Canada take measures to reduce its impact. A good first step would be to help our ailing manufacturing sector where hundreds of thousands of jobs have been lost in the past decade. It should be noted that even now the United States is crafting an economic stimulus package to bolster the economy.

Manufacturing has been crucial in the expansion of the economy. It raised the potential output of the economy with the existing labour force. Also, it enabled industry to lower costs. It cannot be overemphasized then that manufacturing is of tremendous importance.

It is surprising, therefore, that there are many who disparage the significance of manufacturing, claiming that there is a natural shift from manufacturing to the service sector.

This theory gained credence in the 1930s as a partial explanation of the depression.

The foundation for this belief rested on the false assumption that we no longer wanted so many cars, appliances, or "things." Upon reflection, it should be apparent that there is no limit to the number of manufactured goods we lack; many have not been invested, for instance, all the new products in the high-tech field. Hence, it is of vital importance that we reverse the decline in Canadian manufacturing. What steps should be taken?

The most obvious, short-term remedy is in the transportation area. Long overdue is the elimination of the cross-border delays. We are told that solutions are "in the works." Unresolved problems remain, such as conflicts over the jurisdictions involved, the need to determine ramps, crossings, and so forth, along with the multiplicity of traffic lights between the end of Highway 401 and the Ambassador Bridge in Windsor. These obstacles certainly can and should be corrected promptly. Then the location advantages of Canadian production facilities, improving the links to the United States, would increase the demand for Canadian manufactured goods.

Furthermore, we should consider subsidizing the internal transportation of domestically manufactured goods, which would enhance our ability to compete efficiently. The cost of such a policy in taxation dollars and cents would in fact be recovered in the economic benefits that would accrue.

Canada ought to be manufacturing more of the equipment that our governments purchase, such as medical instruments like MGIs and CT scanners. We can build energy-saving articles that capture solar and wind power and coal scrubbers that help reduce pollution from coal use. Furthermore, the Canadian auto industry and companies assisted by innovation funding should be persuaded to utilize more Canadian content.

While over the long term we should extend skills education, now we can make a much greater effort to support our ailing manufacturing industry.


Bruce Whitestone