Vol. 73/No. 11      March 23, 2009

In January, 129,000 workers lost their jobs, 71,000 of them in Ontario where the auto industry is centered. Since October, 213,000 jobs have been lost across the country.

The owners of General Motors and Chrysler firms in Canada are demanding about $10 billion (Can$1=US 80 cents) in government handouts. Industry Minister Anthony Clement says auto workers in Canada will have to accept wage and benefit cuts equivalent to those in the United States. GM, which had 20,000 workers in Canada in 2005, projects having only 7,000 by 2010.

In December, manufacturing sales fell 8 percent from November. This was the fifth consecutive month of decline. An article in the Globe and Mail gave two reasons for the drop: falling prices for exports such as petroleum and forest products and weak demand for goods produced. Approximately 75 percent of Canada’s exports are to the United States. In December Canada had its first trade deficit since 1976. Retail sales declined by 5.4 percent from the month before.

Prior to U.S. president Barack Obama’s visit to Canada February 19, Prime Minister Stephen Harper expressed “serious concern” over protectionist measures in Washington’s “stimulus” bill. It bans the use of most iron and steel from other countries in infrastructure projects.

“Albertans worry as boom goes bust,” headlined an article in the February 20 Globe and Mail. Alberta is the heart of Canada’s oil industry. In six months, $200 billion in Canadian dollars worth of projects have been abandoned or put on hold. The provincial government is predicting a $1 billion deficit for this year.

The Canada Housing and Mortgage Corp. is projecting that home building will drop by 24 percent in 2009. Pension plan assets fell by 15.9 percent in 2008, the worst year on record. One of the biggest pension funds in Canada, the Quebec-based Caisse de dépôt et placement, fell by 25 percent last year, losing $39.8 billion. Average indebtedness of families rose to its highest percentage in 2008: 127 percent of net annual income. In 1990 it was at 79 percent.

On January 27 the Conservative government proposed its budget, which projects $40 billion in spending to try to boost the economy. About half is for construction projects and a one-year tax break for home renovations. The government says the budget should create 190,000 jobs over two years, which does not even cover the job losses since October. Another $69 billion will be given to the banks to boost credit, bringing to $200 billion the amount given to the banks since last fall. Cuts of transfer payments to the provinces were received coldly by the Liberal government in Quebec. The cuts will cost the province $700 million in 2010.

The Liberal Party, Canada’s other dominant capitalist party, supported the budget. Last December, the Liberals formed a coalition with the opposition Bloc Quebecois and the New Democratic Party, threatening to bring down the minority Conservative government. The new Liberal leader, Michael Ignatieff, dropped this threat saying the budget contained some good elements.
 
 
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