Walker told a packed house of 300-plus auto executives, government officials and dealers that not just Ontario, but Canada, too, is becoming “too socialist.”
“We have a hard time bringing high-income people here because of the tax rate. You look at what the U.S. has done on corporate taxes, and it’s balancing out,” he said. “I want to be vocal because quite frankly…I don’t really care about what people think of me or the company. Somebody’s going to speak up and say, ‘Look, if you’re running a brand and if you’re going to criticize the government, they can lambaste you and can hurt your product.
Bill 148 and “bigger government” are stifling investment and productivity improvement, Walker said.
“I love Canada, I’m committed to Canada, but if we don’t start getting people that understand that business needs to be competitive and stop putting the burden on business, they’re going to go. I’m worried,” he said.
The Ontario labour legislation came at a critical juncture for Canadian auto manufacturing, which has lost out on many investments and new plants as automakers and suppliers instead focus on low-wage Mexico and right-to-work states in the United States.
Proponents of the legislation have argued it is necessary to ensure workers receive their fair share of economic gains as the Ontario economy picks up strength.
“We know the province’s economy is doing very well, but not everybody is sharing in that prosperity,” Ontario Labour Minister Kevin Flynn said during a question period in late November.
Walker argued that the legislation could end up doing the opposite by costing Ontario high-paying manufacturing jobs as the cost of doing business in the province rises. He said that Ontario is increasingly becoming less competitive. Walker blames electricity costs, uncertainty created by the North American Free Trade Agreement renegotiations, which picked up again Sunday in Mexico, and greenhouse emissions cap-and-trade laws, which allow companies to trade emissions allowances under a cap set by the government.
“Everybody wants everybody...to make more money,” Walker said during his December interview. “Everybody wants to give everybody more holidays. But at the end of the day, we have to be a competitive society. And I don’t think we should become a socialist society. And if we don’t do things that will attract capital and keep capital here, or you tax wealthy people or entrepreneurs to the point where they say we’re not going to come to this country, it’s a very short-sighted strategy.”
The minimum wage hike is already having an effect, Statistics Canada reported on Feb. 23. Prices in Ontario increased 1.8 per cent, “coinciding with a legislated minimum wage increase,” the agency said, in part.
Ontario and British Columbia (up 2.1 per cent) were the only provinces to record larger year-over-year increases in January than in December, Statistics Canada said.
Unifor President Jerry Dias, speaking in December at Automotive News’ Detroit offices, criticized the idea that Canada and Ontario have few advantages for automakers.
“Is cap-and-trade a disincentive? Anything that costs money is a disincentive,” Dias said. “Don Walker will argue that. Don Walker will argue that our labour rates are too high. Don
Walker will argue that our tax rate is too high. You won’t hear him talking about the Canadian dollar being low. Nobody will talk about our education system. Nobody will talk about our health care.”
Magna, the third-largest automotive supplier in the world by annual sales to automakers, has been one of the most outspoken companies against the labour legislation. In July 2017, Marc Neeb, Magna’s chief human resources officer, warned a committee studying the legislation that it could force the company to re-examine its Ontario operations.
“Ontario has increasingly become a very challenging jurisdiction in which to conduct business,” Neeb said, according to the Canadian Press.
Mark Nantais, president of the Canadian Vehicle Manufacturers’ Association, which represents General Motors, Ford and Fiat Chrysler, said the industry and policymakers must address concerns about labour costs, cap and trade, high electric costs and other factors if they hope to keep the industry’s manufacturing momentum going.
“We’ve come out of that deep, deep hole in 2008. Whether it’s NAFTA or some of the other things, those will detract from that ongoing return to success, if you will,” Nantais said. “We’ve always said that it’s not just one item or one thing that makes us uncompetitive. It’s the ultimate aggregate of those things that puts us in a more tenuous position in terms of cost of doing business here.”