Automotive News Canada - February 2018 - 12

* F E B R U A R Y 2018

In response to Bill 148, Magna International
CEO Don Walker, left, said that "it's not very
difficult to figure out that business might move."
Below, working in a Magna seating assembly
plant. ( P H O T O : M A G N A )

MAGNA'S
DON WALKER
BLASTS
NEW ONTARIO
LABOUR LAWS

DETAILS OF BILL 148
Raises the minimum wage
to $15 per hour on Jan. 1, 2019.
Allows for "card-based certification," which can allow for workers
to unionize more easily.

Company CEO says increased costs will make
Canada even less competitive, but proponents
say 'sharing prosperity' is necessary

By JOHN IRWIN
TORONTO BUREAU

FAR-REACHING CHANGES TO
Ontario labour laws could prevent
automakers and suppliers from
investing in Canadian manufacturing,
the CEO of Canada's largest auto supplier said.
Don Walker, CEO of Magna
International, told Automotive
News Canada he believes the Fair
Workplace and Better Jobs Act,
passed in late 2017, could hurt the
competitiveness of Canadian auto
manufacturing relative to the United
States and the rest of the world.
The sweeping law - Bill 148 -
includes a hike in minimum wage to
$15 per hour in 2019, after rising to $14
per hour on Jan. 1, 2018. Before this,
minimum wage in Ontario was $11.60
per hour. That represents a 29-percent hike in 12 months.
Bill 148 also makes it easier for
workers to unionize and for temporary workers to be paid the same as
full-time workers for doing the same
work.
"It's not very difficult to figure out
that business might move," Walker
said in an interview in December. "It's
not because we would make a decision
to move. It just means our plants in
Canada will have a harder time winning business because it's a global
industry."

CRITICAL JUNCTURE
The labour legislation came at a
critical juncture for Canadian auto
manufacturing, which has lost out
on many investments and new plants
as automakers and suppliers instead
focus on low-wage Mexico and rightto-work states in the United States.
Proponents of the legislation have

argued it is necessary to ensure workers receive their fair share of economic gains as the Ontario economy picks
up strength.
"We know the province's economy is doing very well, but not everybody is sharing in that prosperity,"
Ontario Labour Minister Kevin Flynn
said during a question period in late
November.
Walker argued that the legislation
could end up doing the opposite by
costing Ontario high-paying manufacturing jobs as the cost of doing business in the province rises. He said that
Ontario is increasingly becoming less
competitive. Walker blames electricity
costs, uncertainty created by the North
American Free Trade Agreement renegotiations and greenhouse emissions
cap-and-trade laws, which allow companies to trade emissions allowances
under a cap set by the government.

"Everybody wants everybody...
to make more money," Walker said.
"Everybody wants to give everybody more holidays. But at the end of
the day, we have to be a competitive
society. And I don't think we should
become a socialist society. And if we
don't do things that will attract capital and keep capital here, or you tax
wealthy people or entrepreneurs to
the point where they say we're not
going to come to this country, it's a
very short-sighted strategy."
Unifor President Jerry Dias, speaking in December at Automotive News'
Detroit offices, criticized the idea that
Canada and Ontario have few advantages for automakers.
"Is cap and trade a disincentive?
Anything that costs money is a disincentive," Dias said. "Don Walker will
argue that. Don Walker will argue
that our labour rates are too high. Don

OTHER VIEWS

Ontario Labour
Minister Kevin Flynn
wants current prosperity to be shared
with workers.

(FILE PHOTOS)

Unifor head Jerry
Dias says currency
advantages and the
health-care system
balance out costs
from new labour laws.

Mark Nantais, president of the Canadian
Vehicle Manufacturers'
Association, says
there are numerous
cost concerns, not
just wages.

Maximum fines for companies violating the Labour Relations Act
grow to $100,000 from $25,000.
Workers are entitled to three
weeks of paid vacation if they
have been with a company for five
years or more.
Temporary workers are to be paid
the same as full-time workers for
doing the same job.
Walker will argue that our tax rate is
too high. You won't hear him talking
about the Canadian dollar being low.
Nobody will talk about our education
system. Nobody will talk about our
health care."
Magna, the third-largest automotive supplier in the world by annual
sales to automakers, has been one of
the most outspoken companies against
the labour legislation. In July, Marc
Neeb, Magna's chief human resources officer, warned a committee studying the legislation that it could force
the company to re-examine its Ontario
operations.

'CHALLENGING JURISDICTION'
"Ontario has increasingly become
a very challenging jurisdiction in
which to conduct business," Neeb
said, according to the Canadian Press.
Mark Nantais, president of the
Canadian Vehicle Manufacturers'
Association, which represents
General Motors, Ford and Fiat
Chrysler, said the industry and policymakers must address concerns about
labour costs, cap and trade, high electric costs and other factors if they
hope to keep the industry's manufacturing momentum going.
"We've come out of that deep, deep
hole in 2008. Whether it's NAFTA or
some of the other things, those will
detract from that ongoing return to
success, if you will," Nantais said.
"We've always said that it's not just
one item or one thing that makes us
uncompetitive. It's the ultimate aggregate of those things that puts us in a
more tenuous position in terms of cost
of doing business here."- ANC

Table of Contents for the Digital Edition of Automotive News Canada - February 2018