So GM and the union came to an agreement in Canada in a long battle which would have caused a strike. Not surpringly, Canadians have been kept in the dark about one vital component of this agreement, Canada is fully funding these jobs. This is what has become of our “free market” and it is a warning to other jurisdictions:
The Canadian government is quietly planning to change the key terms of its Automotive Innovation Fund, which has previously offered automakers low-interest loans to support investments in Canada, according to a report earlier this week in the Toronto Globe & Mail. The government is likely to change the fund from a loan program to a grant program.
“Yes, the federal government has clearly signaled that they are going to shift direction and that is very positive,” Unifor President Jerry Dias told the Free Press on Friday. “Do I believe that that will play a role and provide an assistance to us in our negotiations? The answer is yes.”
The fund, introduced in 2008 by the Conservative government of Stephen Harper, offers repayable loans to automakers and parts companies. That structure was viewed as helpful at the time when automakers were struggling to get loans in the midst of the Great Recession. But they are of little use today when automakers can obtain low-interest loans from banks.
The bottom line in all of this, Canada has gone from low interest rate loans which were offered in 2008 and subsequently repaid in full, to grants. “Here is the taxpayers money, it’s yours to keep”. This meddling has been going on for decades in Canada but now it is a disgusting example of how uncompetitive we have become. How will other jurisdictions compete when government is handing out money to pay for employment?"