TORONTO — The autoworkers’ union is set to begin formal negotiations on Wednesday with Fiat Chrysler Automobiles, Ford Motor Company and General Motors, in what one observer calls “the fight of their life”.
Unifor, which represents about 20,000 Canadian workers between the three companies, said the recent COVID-19 pandemic has stoked uncertainty about future job security as economies struggle.
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“This round of talks is especially unique and challenging,” said the union, on its website outlining the auto talks. “This year’s contract talks will pivot on good jobs and future investment.”
Ford also said that “global economic uncertainties” have stressed the importance of maintaining jobs in Canada.
“We’ll be asking our employees to work with us to help shape this new reality together,” said spokeswoman Rose Pao in a statement.
The negotiations will focus on collective agreements that expire Sept. 21. The union said that it will identify on Sept. 8 its “strike target” — the manufacturer it will target first to set a pattern for the other agreements.
Unifor national president Jerry Dias says he will be on the lookout for any attempts by the manufacturers to use COVID-19 as an “excuse.” He says other than improving wage increases, he expects major battlegrounds will be a new product investment from Ford in Oakville, putting a stop to outsourcing Ford parts depots, and restoring the third shift in Fiat Chrysler’s Windsor and Brampton facilities. Dias is also eyeing the 2023 expiration of major programs in GM’s powertrain operation in St. Catharines.
While recent trade policy changes, when enacted, will improve the state of play, Dias says the government needs to do more to attract electric vehicle investments to Canada.
“This is an industry that pays a lot of taxes,” says Dias. “And it’s a lot of jobs. So everybody’s going to have to start to row together in the right direction.”
Ian Lee, associate professor of management at Sprott School of Business at Carleton University, says the economic pressure on the auto industry has created an uphill battle for unions.
“GM, Ford, FCA, I think they’re increasingly in the driver’s seat,” says Lee.
“Unifor, in these upcoming negotiations, they’re in the fight of their life. I think that there is not going to be so much on wages. I think it’s going to be, ‘Can we save the plants that are left?'”
The new round of negotiations come as the industry is still dealing with fallout from the novel coronavirus. For example, FCA plants in Canada were down from March 18 to May 4, and GM plants were closed between March 16 and May 25, after which they gradually reopened.
Like previous recessions, auto sales also sputtered during the early months of the COVID-19 outbreak. DesRosiers Automotive Consultants Inc. said that auto sales plunged 48 per cent year-over-year in March, but by July, sales had fallen just 4.9 per cent, the smallest decrease since the pandemic began.
Nonetheless, DesRosiers predicted that annual sales rates will remain flat for one to two years.
The new negotiations will be set against the background of the new United States-Mexico-Canada Agreement, which went into force July 1.
The deal included a provision that a significant percentage of the value of a car be produced by workers earning the equivalent of at least US$16 per hour, something the Canadian government said could improve Canadian automotive manufacturing’s competitiveness compared to that of Mexico.
While some trade policy changes, when enacted, will improve the state of play, Dias says the government needs to do more to attract electric vehicle investments to Canada.
“This is an industry that pays a lot of taxes,” says Dias. “And it’s a lot of jobs. So everybody’s going to have to start to row together in the right direction.”
Between 1999 and 2017, Canada dropped to the No. 10 auto manufacturing country in the world, down from No. 4 in 1999, Unifor previously estimated.
“Mexico is building smaller cars, in a threat to Canada. But I’ve argued that the biggest threat to Canada is not Mexico. It’s the southern United States,” says Lee.
“In the American South, it’s not only wages that are lower … taxes are lower, state taxes are lower, land costs are lower, cost of living is lower.”
In 2016, GM was targeted by the union, which cited the company’s financial surplus and asked for new allocations for vehicles and powertrain and better incentives for new hires and retirees.
The agreements, which can be hundreds of pages in length, ended up converting 700 jobs at GM and securing a $713-million investment and 500 jobs from Ford, among other issues.
Last year marked the culmination of downsizing at a GM plant in Oshawa, Ont. The plant east of Toronto now has about 300 workers, down from about 2,600.
“There’s going to be a great temptation for the three companies: When they close down these particular cars as a segment, they will not replace them. If you don’t replace them, you close up a plant,” says Lee.
This report by the Canadian Press was first published Aug. 10, 2020.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
OTTAWA – Canada’s inflation rate fell to two per cent last month, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.
The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.
Statistics Canada’s consumer price index report on Tuesday attributed the slowdown in part to lower gasoline prices.
Clothing and footwear prices also decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.
The Bank of Canada’s preferred core measures of inflation, which strip out volatility in prices, also edged down in August.
The marked slowdown in price growth last month was steeper than the 2.1 per cent annual increase forecasters were expecting ahead of Tuesday’s release and will likely spark speculation of a larger interest rate cut next month from the Bank of Canada.
“Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate,” wrote CIBC senior economist Andrew Grantham.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, said Tuesday’s figures “tilt the scales” slightly in favour of more aggressive cuts, though he noted the Bank of Canada will have one more inflation reading before its October rate announcement.
“If we get another big downside surprise, calls for a 50 basis-point cut will only grow louder,” wrote Reitzes in a client note.
The central bank began rapidly hiking interest rates in March 2022 in response to runaway inflation, which peaked at a whopping 8.1 per cent that summer.
The central bank increased its key lending rate to five per cent and held it at that level until June 2024, when it delivered its first rate cut in four years.
A combination of recovered global supply chains and high interest rates have helped cool price growth in Canada and around the world.
Bank of Canada governor Tiff Macklem recently signalled that the central bank is ready to increase the size of its interest rate cuts, if inflation or the economy slow by more than expected.
Its key lending rate currently stands at 4.25 per cent.
CIBC is forecasting the central bank will cut its key rate by two percentage points between now and the middle of next year.
The U.S. Federal Reserve is also expected on Wednesday to deliver its first interest rate cut in four years.
This report by The Canadian Press was first published Sept. 17, 2024.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
