Stephen Harper pledges $1B to help auto sector cope with TPP

Conservative Leader Stephen Harper announced new support for Canada's struggling auto sector this morning in an effort to help it cope with the drastic reduction of tariffs resulting from the Trans-Pacific Partnership.

Infrastructure, land and technology will be included as eligible expenses

The Conservative leader was interviewed by Rosemary Barton today at a manufacturing company in Mississauga 0:54

Conservative Leader Stephen Harper announced new support for Canada's struggling auto sector this morning in an effort to help it cope with the drastic reduction of tariffs resulting from the Trans-Pacific Partnership. 

If re-elected after the Oct. 19 vote, a Tory government would provide $1 billion in new funding over the next 10 years to for the Automotive Innovation Fund, which was originally created in the 2008 federal budget with $250 million over five years to help firms conduct large-scale research and development initiatives by providing automotive plants with repayable loans.

The fund was renewed in 2013 with $250 million more but is set to expire in 2017-2018.

The new $1 billion will prevent the fund from expiring and then will keep it running for an additional 10 years, Harper said during the campaign stop in Whitby, Ont.

About two dozen Unifor members gathered outside the facility to protest Harper's announcement. Ron Svajlenko, who represents auto workers with Unifor in Whitby, said the Tory auto sector fund that the Conservatives are renewing hasn't done much to help the industry.

Jerry Dias, president of Unifor, says Trans-Pacific Partnership will cause 'significant grief' 7:36

"We continue to see various jobs leave this jurisdiction on a regular basis that head to low-cost jurisdictions around the world," he told CBC News.

"Bring us something that works and we'll listen to that."

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Under the revised fund that Harper announced today, a company could receive a grant that would not have to be repaid if it, for example, establishes a new assembly line or a research and development wing that would create jobs. 

The Tories say they would also include the infrastructure, land and buildings needed for assembly plants under the current subsidy program in an effort to make foreign investment in Canada more attractive to foreign automotive firms.

"The programs we have here are not compensation programs," Harper said. "They are incentive programs to attract this kind of investment into the sector and keep this kind of investment in the sector."

A Tory government would also offer non-repayable grants to companies that make firm commitments to build new auto assembly plants.

"We believe that this deal offers enormous benefits for the automobile sector," he said at the manufacturing facility that serves the auto industry.

"In fact, I would go to the other extreme, which is if we were outside this deal, that would be devastating to the sector."

The announcement comes one day after Canada became a founding nation of the 12-member Trans-Pacific Partnership trade deal signed after five days of marathon negotiations in Atlanta. 

Under the TPP, a 6.1-per-cent levy on auto imports will be phased out over five years if it is ratified.

Cars would be allowed into Canada without tariffs as long as they have 45 per cent content from the TPP, lower than the 62.5 per cent threshold under the North America Free Trade Agreement. 

Unifor, which represents more than 310,000 workers, including 40,000 in the auto sector, said in a statement released Tuesday that today's announcement by the Conservatives amounts to an admission that the TPP "will adversely impact the sector."

According to the statement, Unifor has calculated that the TPP auto sector provisions "will ultimately threaten 20,000 well-paying jobs."

"Today's announcement also suggests that after almost a decade in government, the Harper Conservatives have finally realized we need a national auto strategy to support future investment and innovation. But we can't trust the Harper Conservatives to deliver. They've had their chance to champion the auto industry and failed," Unifor national president Jerry Dias said in the release.

Conservative Leader Stephen Harper courted the auto industry today with a promise of $1 billion over 10 years to encourage the construction of new plants and innovation. (Nathan Denette/Canadian Press)

In an interview with CBC's Rosemary Barton, host of Power & Politics, at a manufacturing company in Mississauga, Ont., Harper acknowledged there were many times during the years of negotiations that he believed a deal couldn't be reached.

"Probably only in the last six, seven, eight months that I thought, 'Yeah, you know this is starting to actually come together."

While the deal announced Monday will provide more access to international markets for Canadian exporters, it will result in lost revenue for Canadian farmers. The government announced it would be protecting supply management with a $4.3-billion compensation package to minimize the effects on the dairy, poultry and egg industry.

Barton asked Harper why he didn't just blow up supply management if he really wanted to offer consumers cheap dairy products.

Harper said his government had made commitments to supply management farms, which he said are the backbone of the economy in many rural regions.

The TPP deal will eliminate many tariffs across a range of consumer goods, Harper said, adding that the biggest gains are on the side of workers and export businesses.

With files from CBC's Susan Lunn and The Canadian Press


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