OTTAWA: Canada’s federal government will not reconsider the North American Free Trade Agreement to stem the flow of auto plants and jobs heading to Mexico, said International Trade Minister Ed Fas.
Canada instead can support the auto sector by securing more trade agreements across the globe — in China, India, Korea and across Europe — to give auto parts manufacturers “new preferential access to markets abroad,” he said.
“(Mexico) has one big advantage – very low wage rates,” Fast said Thursday during the Automotive Parts Manufacturers Association conference at Caesars Windsor. “I don’t think anyone in Canada suggests we emulate that.
“Their second advantage is more free-trade agreements around the world than U.S. or Canada, which gives better access to those markets. That’s why we are embarking on the most aggressive and ambitious trade negotiations Canada has ever seen.”
Fast said the federal government is committed to supporting Canada’s auto and auto parts manufacturing sector despite fierce international competition that has taken away thousands of jobs — largely from Ontario.
The APMA group was told earlier this week that Mexico is on track to produce five million vehicles by 2020, up from the three million in 2014. By comparison, Canada is projected to produce 2.5 million vehicles by 2020.
Fast believes as a growing number of trade agreements can be finalized, tariffs will be eliminated and Canada can then emphasize its “strength in innovation.”
“That’s why we are negotiating agreements with India and Japan, that’s why we concluded an agreement with Korea,” he said.
Fast does not believe providing direct incentives to automakers is the best way to secure new manufacturing plants and jobs.
“You don’t want taxpayers feeling they are subsidizing any industry in Canada — including the auto industry,” he said.
Instead, he said the federal government’s creation of the $1-billion auto innovation fund — available for research and development — is a better option.
Combined with corporate tax rate in Canada of 15 per cent, the hope is the auto industry will seek to pump new dollars into this country — including Windsor.
As part of the marketing effort to attract auto investors, Fast also announced that a total of $142,000 is being handed out by the federal government to different organizations, including $38,000 to the Windsor-Essex Economic Development Corporation.
The funds are to be utilized to send representatives to trade shows around the world and develop marketing materials to help with the ongoing global fight to attract auto investment.
