1

Manufacturing Matters

May 7th 2007St. Catharines City Council:

2

Economic indicators appear to be good…Interest rates are low…

Unemployment is sitting at 6.1 percent…a historical low

But the real story is on the local job front…

Corporate profits are robust …at least in Oil and Gas

Every month there seems to be good news about jobs…

3

Ontario lost 171,600 (15%) manufacturing jobs:

St. Catharines has suffered as much as anyone.

Niagara area has lost 15% of its manufacturing jobs

4

2007, Announced Six Plant Closures

Employers Town Jobs

Canada Hair Cloth St Catharines 42

Cadbury Schweppes St Catharines 26

Dana Canada Frame Thorold 125

Niagara Brewing Niagara Falls 11

Haun Drop Forge Welland 29

Dana Canada Thorold 537

5

2006, Three Niagara Plant Closures

Employers Town Jobs

Port Weller St Catharines 250

Newville Candies Niagara Falls 60

Affinia St Catharines 250

6

2005, Six Niagara Plant Closures

Employers Town Jobs

Maax Spas Beamsville 70

ConAgra Niagara Falls 224

Stelpipe Welland 400

Bazaar & Novelty St. Catharines 200

Ferranti Packard St Catharines 275

Alcom Port Colborne 70

7

2004, Two Niagara Closures

Employers Town Jobs

GM American Axle St. Catharines 750

Maax Spas Beamsville 70

8

2003, Seven Niagara Plant Closures

Employers Town Jobs

Saint Gobain St. Catharines 35

Atlas Specialty Steels Welland 630

Atlas Steel 10-1 mill Welland 200

Washington Mills, (Exolon) Thorold 25

Ronal Canada Stevensville 160

Welland Pipe Welland 177

GM - Delphi St Catharines 400

Fleet Industries Fort Eire 350

9

2002, Six Niagara Plant Closures

Employers Town Jobs

Domtar St.Catharines 210

American Axle St. Catharines 340

Cunningham Foundry St. Catharines 70

Zippo Manufacturing Niagara Falls 22

Swagelok Canada Niagara Falls 88

General Drop Forge Welland 85

10

2001, Six Closures

Employers Town Jobs

Taylor & Bate St. Catharines 7

Fantom Technology Welland 365

Irvine Industries Fort Erie 150

E.S.Fox Kent Ave. Niagara Falls 60

GYRO Industries Niagara Falls 60

Gallaher* (2000) Thorold 310

11

Niagara Region Hit Hard

Since 2000, 35 plant closures, a loss of 5,952 manufacturing jobs in Niagara.

Some of these plants have been around since the 1920’s

These statistics do not take into account, downsizing that has taken place in manufacturing facilities!

General Motors 9,000

Atlas steel 2,400

Dana 3,000

2,800

0

200

12

In the last 4 1/2 years Canada has lost about 250,000 manufacturing jobs.

In 2 years, the job loss rate has actually accelerated.

More than 150 jobs are lost every single day.

In the time it takes to do this presentation, 2 manufacturing jobs will disappear

Canada's Manufacturing Sector

13

Condition is Chronic

Manufacturing share of jobs in the economy down 25% in 10 years

Not in a recession: Early 80’ and early 90’s Period of economic growth

Not isolated to one sector, one region, or one period of time.

14

Other Regions: Other Cities

Nova Scotia Lost 20%

Quebec Lost 18%

Windsor Lost 25%

Toronto Lost 21%

Oshawa Lost 21%

Thunder Bay Lost 20%

St Catharines Lost 26%

Toronto lost 104,600

jobs

St Catharines lost 2, 855

15

Sector Jobs Lost %

Textiles and Clothing 66,000 -40%

Aerospace 8,300 -16%

Shipbuilding 3,300 -32%

Food and Beverage 40,000 -13%

Primary Metal 12,500 -13%

Paper 8,500 -9%

Wood products 10,700 -8%

Automotive 10,000 -7%

The problem is widespread. Across manufacturing industries...

16

Manufacturing Share of Total Employment (Canada) Jan '87 - Dec '06

10%

11%

12%

13%

14%

15%

16%

17%

Jan 1987 Oct 1988 Jul 1990 Apr 1992 Jan 1994 Oct 1995 Jul 1997 Apr 1999 Jan 2001 Oct 2002 Jul 2004 Apr 2006

16.7% of CDNWorkforce

12.5% of CDNWorkforce

2002 Start of recent decline

Manufacturing is on The Critical List

Loss of 4.2%

17

Trends bounce back… Manufacturing is in a Free Fall

Manufacturing Share of Total Employment (Canada) - August 2002-January 2007

11.00%

12.00%

13.00%

14.00%

15.00%

Aug 2002 Dec 2002 Dec 2003 Dec 2004 Dec 2005 Dec 2006 Jan 2007

18

Unbalanced Trade is a major problem

Large and growing manufacturing trade deficit From a surplus of $12 billion to a deficit of $29

billion in a decade.

Deficit grew by 75% during 2006, highest on record. Trade exports have shifted to resources

2005 was the first time that mineral fuel products (oil and gas) passed transport vehicles as our top export.

Losing ground on all accounts Low-tech, resource-based manufacturing, and higher

value-added

19

Manufacturing - Niagara's Economic Engine

Accounts for: 18.4% of local economy 25,600 workers Auto is critical Almost 1 in 4 are auto workers

Manufacturing is Diverse 4,900 Metal Workers 3,800 Food & Beverage workers Petrochemical, Paper and many others

20

Loss of manufacturing jobs affects everyone Manufacturing workers earn and spend

close to $1.5 billion a year. Supports regional economy Supports infrastructure Local tax base (property taxes) Major contribution to income tax Support local business

But it used to be more 4,400 lost jobs is an impact of over 239 million dollars

in lost wages every year.

21

Ripple effect…

A crisis that affects everyone All the spin-offs

tourism, food and retail, social programs, charities

Chronic Insecurity Even those who have jobs are constantly

threatened

22

Manufacturing Matters

Manufacturing is a vital source of jobs:

2.1 million Canadians, or 1 in 8 jobs 1 in 6 jobs in Ontario1 in 7 in Niagara

23

Benefits Spread Far and Wide

Canada’s Manufacturing Sector:

Directly accounts for 17% of economic activity

Purchase of goods & services, and spin-offs, total up to 55% of economic activity.

Creates $3.05 elsewhere for every $1 activity.

24

If Manufacturing Isn’t The Future?

Has highest value-added sector

Accounts for two-thirds of nation’s exports

Accounts for 75% of private sector R&D

25

These Are Good Paying Jobs

Family-supporting Pay: Hourly pay in Ontario: $21.33

With overtime, $50,900 per year 24% higher than average for all Ontario Replacement jobs pay 25% less

Opportunities for our youth: We need core industries Engineers, Trades, Apprenticeships,

Management, as well as line workers

26

Support For Our Communities

Canada’s manufacturing workers: Direct payroll of $94 billion per year Generate income taxes of $20 billion per year

Health Care Education Infrastructure Social Services

Add to this: sales, property and other taxes. If you care about our social programs, you

have to care about manufacturing.

27

Niagara Information Meeting

Rick Alakas Wayne Gates

Tim LambertDavid Robertson

28

What we want to do…

Demonstrate that the Manufacturing sector is key to the future of Canada

Draw attention to the impact job losses is having on communities like St Catharines.

Point out that the crisis…is being ignored Call for a report & debate on the manufacturing

crisis

Our draft resolution asks for …

29

Draft Resolution...

Identifying the manufacturing industry as a strategic sector in Canada’s economic development;

30

Draft Resolution...

Undertaking a comprehensive review of the causes and consequences of manufacturing job loss;

31

Draft Resolution...

Adopting a comprehensive and integrated set of economic, fiscal and monetary policies along with a framework for fair trade that will both strengthen domestic manufacturing and protect manufacturing jobs; and

32

Draft Resolution...

Ensuring that all Canadian workers are protected in job loss through the improvements of bankruptcy laws, wage protection, pension protection and enhanced employment insurance benefits.