KITCHENER, Ont. — The federal government must step up to the plate and help the province's struggling manufacturers by doing more than just cutting taxes, Ontario Premier Dalton McGuinty said Tuesday as he vowed to press Prime Minister Stephen Harper at this week's first ministers' meeting.
The federal government has to invest in manufacturing to help Canadian companies compete in the global economy, McGuinty said at aerospace manufacturer Heroux-Devtek Inc., where he announced a $2.85-million loan.
''I know that the federal government remains in a very healthy financial position,'' McGuinty said. ''It's all about priorities. In a time of economic challenge, it's important for us to find a way to lend support, to help our industries transition and become more competitive and more productive.''
The government can't control the strength of the Canadian dollar or the price of oil but governments can choose to forgo tax cuts in favour of financial support for companies struggling to survive, McGuinty said.
The province is managing to cut the capital tax while giving financial assistance to manufacturers at the same time, he added.
''Just to cut taxes, fold your arms and stand aside and allow the forces of creative destruction to play themselves out is unacceptable,'' he said. ''What I'm saying to the federal government is, come to the table. ... You've got to do more than just cut taxes.''
McGuinty said he'll be delivering that message to Harper when he meets with the country's premiers in Ottawa on Friday.
In something of a pre-emptive strike, Harper is expected to announce relief on Thursday, one day before the premiers' meeting, in the form of millions of dollars for retraining workers in the forestry industry who have lost their jobs.
It's unclear if the program will also apply to workers in other ailing sectors, such as the auto industry.
The rise of the Canadian dollar and its effect on the manufacturing and export sectors is expected to be the main focus of Friday's meeting. It's being held with much less fanfare than a normal first ministers' conference: over dinner at 24 Sussex Drive rather than as a full-blown national economic summit, which McGuinty and some other premiers had called for.
Still, McGuinty said he will take what he can get.
''All of us would love to have more time to consider how to further strength the Canadian economy but we'll make the best of the limited time that we have,'' he said.
McGuinty said he will also use the time to press for equal treatment for his province's workers under the Employment Insurance program. Ontario workers have to work longer to qualify for EI and get less money than their peers in other provinces, he said.
''We think that's unfair and we want the prime minister to put a stop to that,'' McGuinty said.
Gilles Labbe, president and CEO of Heroux-Devtek Inc., said his industry is facing ''significant challenges.'' With 70 per cent of his aerospace products exported abroad, the high Canadian dollar has made it harder to compete against companies in lower-cost countries, he said.
''Aerospace is a global industry,'' he said. ''The aerospace industry all over the world is supported by their governments. If we don't have the same type of support from our Canadian government or provincial government, it will be very difficult to compete.''
Canada should aspire to do more complex manufacturing, but that takes an investment in worker training and modern technology, Labbe said. Manufacturers don't have the option of passing the increasing cost of technology and training on to consumers, he added.
''I've not met with one customer that wants to pay more money for our products,'' he said.
But Progressive Conservative Leader John Tory said Ontario must clean up its own act before it can go begging to Ottawa. Ontario has some of the highest corporate taxes in the country, which is hurting manufacturers more than any federal policy, he said.
Instead of focusing on what can be done to reduce interprovincial trade barriers and corporate taxes, Tory said McGuinty appears to be picking a fight with the federal Conservatives.
''Mr. McGuinty's early signs — trying to create fireworks before he even gets to the meeting this week — isn't encouraging,'' Tory said. ''He's setting himself up and he's setting the meeting up for confrontation and for failure.''
