Auto industry benefits all of Canada

TORONTO, March 30, 2015 /PRNewswire/ - A new study released today confirms the massive economic benefits from the General Motors operations in Oshawa.

"Canada is a great place for GM to do business, and we all benefit greatly from them being here," Unifor National President Jerry Dias told a press conference this morning.

The study, "Economic Impact of GM Operations in Oshawa," released today by Unifor, found the complex boosts Canada's Gross Domestic Pro duct, supports tens of thousands of jobs, generates vital tax revenue to support such services as health care and education, and even significantly bolsters the Canada Pension Plan. The report was authored by Robin Somerville of The Centre for Spatial Economics, an independent economic modeling firm.

"The benefits to all Canadians are evident in this report. This underlines why Canada needs a focused strategy to win new auto investment, just like other countries have," Dias said.

The study examines the overall economic impact of GM's Oshawa complex – including its 3,600 hourly production workers and an estimated 500 salaried staff whose jobs are tied to manufacturing production there. 

The analysis considers the direct GDP produced in the facility, the indirect impact on auto parts and other supply industries and the economic activity stemming from the spending and re-spending of workers' wages. It finds that if the Oshawa complex closed entirely, Canada's GDP would shrink by more than $5 billion per year within two years.

A total of 22,000-24,000 jobs would be lost immediately, with close to 33,000 jobs lost in Ontario within two years. Eventually employment partially rebounds, but at the expense of a permanent decline in average wages – even for workers who do not work in the industry.

Governments are also dramatically affected: the federal and Ontario governments see a permanent loss of revenues and an increase in their deficits of close to $1 billion a year combined. Lost CCP contributions would lead to an increase in contributions or benefits cuts.

"This study confirms that a major auto assembly facility like Oshawa is an economic anchor, generating enormous spin-off benefits felt throughout the economy," Unifor Economist Jim Stanford said. "Workers, businesses and governments all enjoy a much stronger economic situation thanks to strategic manufacturing facilities like this one."

"But it's not just that GM is good for Canada," said Stanford. "Canada is good for GM."

He cited several recent investments and expansions in Ontario's auto industry as proof that Canada is a good place for automakers to invest, including Ford in Oakville, Chrysler in Windsor, GM in Ingersoll and Honda in Alliston.

"Canadian auto workers provide the highest levels of quality, productivity and innovation in the world, at a very competitive cost," Stanford said.  

"This report is a call to action," said Dias. "All stakeholders need to combine forces to make sure that GM maintains its strong manufacturing footprint in Oshawa, in St. Catharines and other Canadian locations."

For a copy of the report, go to unifor.org.

Unifor is Canada's largest union in the private sector, representing more than 305,000 workers, including close to 40,000 in the auto sector. It was formed Labour Day weekend 2013 when the Canadian Auto Workers and the Communications, Energy and Paperworkers union merged.

SOURCE Unifor