CAW Strongly Urges Ontario and Federal Governments to Keep GM Shares
November 30, 2012, 4:00 PM EST
The CAW is strongly urging the Ontario and federal governments to hold onto its shares of General Motors and not sell them for any short term fiscal or political gain.
"The Conference Board of Canada and Scotiabank have both recently issued reports indicating that auto industry profits in North America are at record highs, and poised to get even stronger," said CAW President Ken Lewenza. "This is clearly not the time to sell the government's shares."
Lewenza made the comments in reaction to today's news that the Ontario government is considering selling its shares in GM.
Independent economic studies have confirmed that the Ontario and federal governments have received a net fiscal benefit from their original investments in GM and Chrysler during the financial crisis of 2009. "The enormous personal and corporate tax revenues paid by a revitalized auto industry and the tens of thousands of auto assembly and parts workers in Canada, mean that this investment has already paid dividends for Ontario workers and taxpayers," Lewenza said.
The federal and provincial governments have much more to gain in holding onto their shares, and using them to leverage a larger production footprint in Canada by GM in the future, Lewenza suggested.
"Contrary to conventional free-market rhetoric, it makes good business sense for governments to own direct equity stakes in crucial industrial firms. This is the practice in other successful auto exporting jurisdictions, like Germany, France, and Asia, and it should be our practice, too," Lewenza stated.
"Whether it likes it or not, the Ontario government is clearly in the auto business, and has to be. This industry's presence in Ontario is too important to Ontario's economic and fiscal health for government not to play a central role," Lewenza concluded.
In its April 2012 auto policy document called "Re-thinking Canada's Auto Industry: A Policy Vision to Escape the Race to the Bottom," the CAW urges governments to maintain their minority stake in GM.
"We urge the Canadian and Ontario government to maintain their current minority share of General Motors, and to utilize that share in a more pro-active effort to ensure that Canada's economic interests are respected in GM's future business decisions," the report states on page 37.
The full report can be accessed at: http://www.rethinktheeconomy.ca/resources.
Finance Canada has indicated government support for the industry saved 52,000 jobs.