Ontario Premier hints at pumping more cash into surging auto sector

Premier Dalton McGuinty is hinting that his cash-strapped government is prepared to invest more money in the auto sector to help it respond to a strong sales recovery.

“They are in a sense our leading goal scorer,” Mr. McGuinty told reporters on Tuesday. “They put the puck in the net over and over again on behalf of the Ontario economy. We need to find ways to ensure that they remain healthy.”

Mr. McGuinty made the comments immediately following his remarks to a business audience at the Bloomberg Canada Economic Summit, where he talked about the breakdown in wage talks between the province and its doctors.

With the province facing a deficit of $14.8-billion this year, Mr. McGuinty said his government has no choice but to call on doctors and all other public sector workers who bargain collectively to freeze their wages for two years.

“Our doctors are going to have to take some strong medicine in order to make our economy better,” he said.

But when it comes to producing cars and trucks, a key driver of jobs in Ontario’s battered manufacturing sector, Mr. McGuinty said he will look at whether his government should “deploy our limited business supports” in the auto sector.

He was responding to a report in The Globe and Mail, saying the Detroit Three auto makers cannot produce enough cars to respond to a strong sales recovery and forecasts that the North American market will be even more robust later in the decade.

The report, done for the federal government by the Center for Automotive Research, an industry think-tank based in Ann Arbor, Mich., says “capacity shortages” are projected to be an issue for the Detroit Three by 2018.

“This is a great kind of a problem to have,” Mr. McGuinty said. “They’re telling us that we need to produce more cars, so we’ll have an opportunity to consolidate if not indeed enhance our standing as the No. 1 producer of cars in North America.”

The auto sector has grown in Ontario and retained its pre-eminence even in the “darkest days of the recession,” Mr. McGuinty said, because his government has worked hand in hand with it.

Mr. McGuinty said he plans to turn to the Jobs and Prosperity Council his government is in the process of creating for advice on where to invest.

“I’d be surprised if there’s not some continuing advice that we need to find ways to work with the auto sector,” he said.

Original Article
Source: Globe
Author: KAREN HOWLETT