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The Budget Omits Crucial Support For The Auto And Aerospace Sector

03/24/2016 02:28 EDT | Updated 03/25/2017 05:12 EDT
Bombardier

The first budget from the new Liberal government is full of promise, and even a few good moves on several fronts. But it also fails to deliver in too many ways, such as support for the key auto and aerospace sectors.

Don't get me wrong, there is much to celebrate in this budget, including the essential move to reject austerity and use the tools of government to simulate a weakening economy. But on each count, it seems, an opportunity was lost to do more.

The reforms to Employment Insurance, for instance, will mean that recipients won't wait as long to start receiving benefits and can collect benefits longer. And for those hit hard by the drop in oil prices, there are additional improvements.

That's all good, but the benefit rates themselves have not changed. That's a missed opportunity to further help working people who have lost their jobs.

The Kitsilano Coast Guard station, closed by the previous Conservative government, will reopen and expand. But there was no mention made of the other closed stations, or the Comox station that is scheduled to close. Another opportunity lost.

The budget's allocation of $89.9 million to build 3,000 women's shelter spaces, which will make it easier for more women to escape violence, is also welcome -- but an opportunity was lost to restore funding for women's groups across the country.

The budget provides infrastructure funding of $60 billion in new money over 10 years, but most of that money will only start flowing five years from now -- well into the next government's mandate. Only $11.9 billion will be spent in the next five years, in a program the government claims will help restore the middle class. Back-ending the funding so severely will make achieving that goal much more difficult. Yet another opportunity lost.

The needs of Canadian families are real and immediate. For families struggling today, years of consultation before the real money starts to flow will only add to their troubles. Their children will grow older, maybe even leaving home to start lives of their own, while the government consults.

This new government needs to act more quickly. With interest rates at historic lows and Canada's debt to GDP ratio well below the G-7 average, now is the time to act.

A good place to start would be the auto and aerospace sectors. Between them, these two advanced manufacturing sectors directly employ more than 200,000 Canadians in good jobs that form the backbone of Canada's middle class. Even more are employed in the spinoffs from these two sectors -- both the suppliers to auto and aerospace, and the spending habits of its well-paid workers.

No plan to rebuild the middle class in this country is complete without support for auto and aerospace.

Tuesday's budget, however, did nothing for either sector. Rather than reform or replace the Automotive Investment Fund (AIF), this week's budget merely extended the flawed policy of the former Conservative government for another three years while the Liberal government consults on what to do.

There has already been much discussion about the AIF, and the consensus view of the industry is that its system of taxable loans is not working. So it is deeply disappointing that this budget contains no concrete measures to bring in a workable program.

The government needs to recognize that it has an important role to play if Canada is to continue having a strong auto sector, our largest exporter.

Similarly, it was disappointing to see no concrete measures to support the aerospace industry beyond the space program -- a glaring omission in a budget identifying innovation and greening of the economy as its top priorities.

Bombardier's C Series jet, for instance, is not only the company's first foray into the lucrative single-aisle commercial aircraft segment, currently dominated by the Airbus 319 and Boeing's 737, but it's use of 20 per cent less fuel use also marks a major step forward in aviation research.

This is exactly what the Liberal government signaled in its first budget as its top priorities - innovative research and a greener economy. While no mention of Bombardier was made in the budget, we remain hopeful that an announcement supporting the CSeries program will come soon.

Throughout the budget, the words consult and consultation appear over and over, including around any plans for auto and aerospace. Consulting can be a good thing, as long as it doesn't go on too long or become an excuse for doing nothing.

But talk won't restore the middle class. Talk won't put Canadians back to work or help them retire with dignity. What's needed is action.

Consult with stakeholders, Unifor included, sure, but be quick about it.

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