The Canada-U.S. Automotive Products Agreement

MR. STAPELLS:

Almost from the beginning, Canadian unionism was predominantly international, first with Britain and then with the United States.

The Toronto Printers struck for a nine hour day in 1872 in the face of stern opposition from the Father of Confederation, George Brown of the Globe. After 24 members were arrested on charges of seditious conspiracy, Sir John A. Macdonald came to the rescue and for the labour vote with The Trade Unions Act.

With this, unionism grew in Canada. And throughout the history of Canadian unionism, the reconciliation of continental union solidarity with Canadian autonomy has posed a continuing problem.

Organized labour in Canada today has reached its alltime high of 1,736,000 members, of which the international unions represent just over 70%.

Today we welcome to our Club the Canadian Director for almost 30 years of the 96,000 strong United Auto Workers, one of the largest unions in Canada. Mr. Burt, in addition to looking after his own membership, which extends from sea to sea, is also a general Vice-President of the Canadian Labour Congress, our national labour body, and has frequently represented the C.L.C. at international labour conferences. He is no "dealt-off-the-top" executive as he began his career in the body shop at General Motors, Oshawa, and was instrumental in chartering Local 222 of the U.A.W. there.

Both friend and foe recognize in Mr. Burt a skilful negotiator with a talent for timing, much like the young boy who was bargaining for the privilege of picking off the vine the farmer's 5¢ ripe red tomato, with only 2¢ in his pocket. The farmer said he could have the small green one instead for his 2¢. With that the boy plunked the 2¢ in the farmer's palm and said, "O.K. I'll buy that one and come back for it in a week." To get what you want, it's all in the timing.

I should also mention that the folks down Kingsville way know farmer Burt as a keen birdwatcher, particularly famous for the citing of two bald-headed eagles on his estate.

Mr. James Dykes, General Manager of the Canadian Automobile Manufacturers Association, was reported in yesterday's press as saying that the auto pact is fulfilling its purpose of increasing employment and production in Canada, of narrowing the price gap between Canadian and U.S. cars and reducing the deficit in Canada's auto trade.

It is my pleasure to introduce to you Mr. George Burt, Canadian Director of the U.A.W. and a Vice-President of the C.L.C., to give his view of the Canada-U.S. Automotive Products Agreement.

MR. BURT:

I really feel indebted to my good friend Mr. Jolliffe and your President, Mr. Stapells for extending to me this opportunity of speaking to your membership on the Canada-U.S. Automotive Products Agreement and to bring to your attention some of the history of this agreement and the position of the membership of our union after having very close contact with its operation.

In 1960, the UAW and a number of other citizens living in the automotive communities expressed considerable apprehension about the inroads of the European car pro ducers into the Canadian new car market. At that time the British and Europeans were selling 28% of all new cars sold in Canada. They had practically no manufacturing or assembly operations in Canada but maintained a number of service depots throughout the country. As a result of our examination of this situation, we decided to take a strong delegation to Ottawa to meet the Canadian Cabinet and request an investigation of the industry by a Royal Commission. About 200 auto workers met members of the Cabinet and this request, reinforced by similar requests from city councils and other civic-minded people, resulted in the appointment of a Royal Commission chaired by Professor Vincent Bladen of the University of Toronto.

Two of the most important factors emerging from the investigation by the Royal Commission were: (1) a great deal of the penetration of the Canadian market was due to the promotion by European car makers of a small car which was eagerly accepted by the Canadian car buyers, and (2) the high price of the Canadian product was mainly due to the low volume in Canada compared to the United States. The UAW had already proposed to the car makers in both Canada and the United States that they produce a small car and the car makers started to produce them in ever-increasing numbers about that time.

We asked the Royal Commission to investigate the feasibility of integrating the Canadian and U.S. automobile industry in order to be able to compete with the European imports.

The Commission recommended that Canada and the United States integrate their markets into one North American market by the elimination of the Canadian tariff of 171/2 % against the importation of American cars with a provision that the Canadian market be protected from the huge volume manufactured in the United States by guaranteeing a certain percentage of the North American market would be manufactured in Canada and based on the 1965 production year that this volume would be guaranteed to Canada. In return for these guarantees the American car manufacturer was given free entry into Canada.

We knew at the outset this would cause employee dislocation in the Canadian industry and we recommended to Professor Bladen that a tripartite committee be established composed of labour, management and government for the purpose of giving protection to workers who were dislocated by either transferring them to other jobs or supplying additional work in the industry at the same geographical location.

As a result of the efficiencies which this new agreement would provide to the Canadian industry, we also felt that prices could be substantially reduced. The Order-in-Council establishing an overall North American market was subsequently passed (January, 1965), and our experience of this legislation has not been satisfactory.

The government established a new benefit for dislocated workers called the Transitional Assistance Benefit (TAB) but when they found out our union had negotiated with all the automobile companies, a Supplemental Unemployment Benefit Plan (SUB) to take care of seasonal dislocations and temporary layoffs which this industry has always been plagued with, they made a regulation in Ottawa requiring the workers to use up all benefits under their SUB plan before they were permitted to participate in the TAB plan. We informed the government that we had set aside 5¢ of our wage package to pay for SUB to apply to layoffs during the regular layoff and changeover period in the industry and suggested to the government they had no business to use this negotiated nickel for the purpose of getting from under their responsibility of paying the cost of dislocation caused by their legislation.

In the regulations governing TAB, there is a section providing for a voluntary agreement by the employer to repay the government for the cost of TAB in which case the government would extend the benefits of TAB to the dislocated workers. Not one automotive employer has agreed to do this and those workers in the industry who decided to take the 5¢ in their wage rate rather than put it into the SUB, fund can obtain benefits from TAB.

In the United States a worker who is dislocated by the: operation of the same Automotive Products Agreement receives the American equivalent of TAB with no reference whatever to any union-company negotiated SUB plan and in the United States the plants are covered with exactly the: same SUB Plan as we have in Canada.

The government refused to set up the suggested tripartite committee that I mentioned previously and as usual waited for an emergency to happen before they did anything about dislocation. Well the emergency happened. Fifteen hundred workers were laid off in Ford in 1965 and some did not return to work until March, 1966. They did not receive TAB.

In September, 1966, three thousand workers were laid off at the General Motors plant in Oshawa and did not receive TAB even though they were told when they were laid off that it was a permanent separation from the company. Some of these workers were buying homes in Oshawa and raising families and suddenly their jobs are taken away permanently by legislation with no plan for their assistance..

The government made a statement to the press that they would be retrained for other jobs and that jobs were available for all of them, but as of today, these workers are not retrained and have not obtained alternative employment. Some may receive benefits from TAB, if they are not eligible for SUB, or have run out of their SUB.

The Manpower representative had xo revise his earlier statement to the press and admit they could not find alternative employment for the displaced workers. As of now, there is a long list of people who have applied for a retraining course but due to lack of facilities and lack of instructors,,the government cannot provide them with either training or alternative jobs.

One of the advantages we have found in the now divided portfolios of Labour, under Mr. Nicholson, and Manpower, under Mr. Marchand, is they are able to refer you from one to the other, each saying that it is the other's responsibility. They are trying to depend on the inadequate old National Employment Service which has been converted into the new Manpower Department to handle a volume situation and dislocation that the department is not equipped to handle.

In the General Motors plant in St. Catharines, one thousand jobs disappeared-about 400 of them going to the United States and the Oshawa story can be repeated in St. Catharines.

In Windsor, 200 people were dislocated at the McKinnon Industries (GM) as a result of the operation of the pact, and to show you how "cooperative" the automobile makers are, these workers applied for a job at Ford Motor Company who were hiring in Windsor and were told they would have to bring their separation slips from General Motors before they would be hired in Ford. They would have to give up their seniority, pension and SUB entitlement, and their entitlement to recall in their original plant even though the new employer could not tell them if they would be employed for a week, a month or a year. Real cooperation by the industry when you realize they were given a $50 million gift at the expense of the Canadian taxpayer, when the government wiped out the 171/2 % tariff.

We have been to Ottawa at least six times and so far we have not even come close to getting the government to agree to a tripartite committee to discuss these problems when it costs nothing but a few moments of their time which they seem to have plenty of to devote to other important matters such as scandals etc.

Now the UAW is getting "hell" again in the press and from the Economic Council of Canada because we dare to ask for wage parity with the American auto worker in a North American market when we are building the same car with the same kind of tools for the same company. They say the Canadian workers and the companies in Canada have not reached the degree of efficiency that justifies our demand. They say it would cause inflation.

Let us look at some of the facts upon which we base our demands for wage parity. Although our plants are supposed to be inefficient compared to the United States, the Ford Motor Company is shipping at least 50% of its total Canadian production to the United States and Chrysler has shipped 70,000 low-priced cars to the United States.

General Motors has now started to ship cars to the United States from their new plant in Ste. Therese, Quebec where we had them tied up for two and a half months on strike in order to achieve wage parity not with the United States but with Oshawa. They have now put on another shift and doubled the work force while several thousand workers with considerable years of service are unemployed.

Our records show that in 11 months of 1966 the inefficient Canadian industry shipped 185,000 cars to the United States compared to 41,000 in 1965 when the pact was just starting to get going. Previous to the enactment of this legislation there were practically no cars shipped from Canada to the United States. During the same 11-month period in 1966, the "efficient" American plants shipped only 115,000 cars to Canada. It is also a strange thing that the "inefficient" plants in Canada have successfully competed in price with the American product because otherwise the Americans would not buy the Canadian products. Yet these same cars with identical equipment that are shipped to the United States are sold in Canada but you pay from $600 to $1,000 more for that car in Canada. However, you also pay more for the U.S.-made car than the American consumer. even though the tariff has been eliminated. I realize there is a considerable difference in the tax structure applied to the industry in Canada compared to the United States, but I maintain there is not this much difference and if this piece of legislation is not going to result in a square deal for the auto worker and a square deal for the consumer, then it is not doing the kind of job we thought such an agreement could do when we proposed the integration of our respective automobile markets between the United States and Canada.

Will our demand for wage parity be the cause of inflation? We do not think so. There is no reason to suggest that corporations who have just concluded the second best year in their history cannot afford to grant our wage parity demand without increasing prices. We say they can not only grant our wage parity demand but they can reduce prices to the consumer and our contention is based on their profit figures and the relationship of their percentage of profit to their net worth.

We will be quite satisfied to be dealt with on the same basis as the shareholders in these companies. A Canadian shareholder in General Motors receives exactly the same dividend as a shareholder in the United States and if the Canadian section of the industry has not achieved the efficiencies which would justify wage parity then why should the shareholder not make less than the United States shareholder and make his contribution as well as the worker?

The differential in wages may seem to be a staggering increase to ask for but only if you apply the cost to the Canadian--market. Now that we have a common North American market, we say the cost of the Canadian demand should be borne by the whole North American market and if the impact of our parity increase is spread over the manhours worked in the entire North American industry, it will probably amount to approximately less than a nickel an hour.

I would like to see the Government of Canada or the companies, for their own benefit and for the benefit of the Canadian consumer, put tables before the Canadian public indicating the differences between the price of the same car and the same equipment in the United States and Canada and the application of the taxes in both countries and give the consumer an idea of the difference.

I repeat the Canada-U.S. Automotive Products Agreement has obviously benefited Canada which means the Government of Canada also and has also been a substantial benefit to the auto maker. The only one of the three to suffer is the workers and we are going to fight hard in 1967 to prevent further discrimination and to get what is justly coming to the auto workers whether it be in the matter of wages or in the matter of preventing dislocation.

The auto workers have subsidized this operation both as to wages and dislocation long enough. The consumer has subsidized the industry through higher prices. We only ask for a square deal. You are consumers. We are fighting for you. How about helping us?

Thanks of the meeting were expressed Mr. Joseph H. Potts.