Investment in homegrown innovation a must for the economy

Monday’s announcement that General Motors will not allocate production to its Oshawa plant after 2019 for the first time since 1953 may be a drop in the bucket compared to the thousands of well-paying manufacturing jobs already lost in Ontario, but it will have a real impact.

It’s a safe bet many of those plant jobs won’t be replaced with others on par and the spin-off effect of those 2,500 jobs and countless others that supplied the auto sector or catered to those individuals will have an impact not only on the Durham Region, but more broadly. Also, symbolically, it’s a gut punch for a province that has prided itself on making things over the years.

Many theories have been banded about already about the reasons for this closure and previous ones. Trade disputes between Canada and the United States driving up the price of steel and limiting markets haven’t helped. Higher electricity and labour prices have increasingly opened the door to the global market. Changing consumer trends and expectations leading General Motors’ willingness to stake its future in electronic cars has also been a factor. Whatever the reason, it’s not likely that traditional fossil fuel-powered vehicle production is going to spike in Canada, unless there’s a willingness not currently on display to capitalize on the Alberta oil sands and find green and cost-effective ways to get that resource to markets across the country and elsewhere.

The question, then, becomes what Ontario and Canada can do to keep manufacturing alive. Many taxpayers are skeptical of corporate welfare and Monday’s announcement only exacerbates those views. That really shouldn’t be part of the deal to keep companies around who may or may not commit to the local economy for the long haul.

That said, it would be worth governments exploring what kind of incentive they can legally deliver for Canadian-owned corporations that are committed to hiring here and serving the domestic market first. Anything they can do to ensure producers are competitive with rivals outside Canada that are able to mass produce goods at a lower cost for export should be considered.

Finding safe, reliable and cost-efficient energy sources would certainly be welcomed by those looking to set up shop here, as would streamlined regulation, and access to a skilled, affordable workforce. All of that can be difficult to produce, particularly given public debt and the reality that Canada is paying interest to those it competes with.

If there is to be public investment to encourage the transforming economy, let the money go toward training and fostering innovation. If Canada and Ontario can focus on the STEM sector and establish incubation models to keep its brightest minds from leaving for other jurisdictions, it can build a reputation for being the leader in the technologies companies like General Motors predict as market leaders in the future. Those thinkers will require a skilled workforce nearby to build prototypes and, from that, manufacturing and service industries can build around them.

The reality is it’s an increasingly competitive market for foreign investment today. By attracting and building a homegrown knowledge base — and welcoming innovative thinkers to be Canadian — public leaders can foster fertile ground for investment. That has to start with co-operation from all levels and political viewpoints on building a strategy. Perhaps General Motors’ choice can become the catalyst to do just that.

– Adam Bramburger