Ask any economist, he or she will tell you that just because we can make furnitures doesn’t mean that we should make furnitures. One country’s specialization in international trade is based on comparative advantage. In other words, we do it not just because we can, but because we can do it better (and in today’s economy, that usually means cheaper) than others. This is what will attract investment. This is what will help us compete in the world. Look at what happen to our automotive industry, an industry that we totally can do it, but we can’t because we don’t have comparative advantage anymore.

Jack Layton and the NDPs are clueless on the economy. They don’t understand economics. Even the idea of them being the official opposition sends a chill down my back!

Over the past few weeks, the crude oil price has dropped significantly. However, the gasoline price of shot up 13 cents per litre last Friday when hurricane Ike was hitting Texas. That is even more expensive than the summer when oil price was at record high close to $150 USD per barrel.

I don’t know what is so wrong with the pricing mechanism of gasoline, but what I find it most bewildering is how come Canada, as an oil-producing and exporting nation, have to suffer from such high gasoline price when the hurricane is not even hitting our shores!

I am a zealous believers of free market economy so I am not even going to ponder the notion of nationalizing our oil industry in Canada. Trade is based on the idea of comparative advantage and all trading partners are better off as a result of trade. Better off means that the total output (hence consumption) is higher. However, if most of our oil are sent to the United States and in turns, we have to buy the gasoline back from them, how is this better off for Canadians? Perhaps it’s time to consider investing in building more oil refineries to increase capacity?

When it comes to economy, the Conservative gets it, the NDP doesn’t! Buddhist has a saying that the only constant in this univese is change. We are living in the 21st century and our economy is constantly changing. It used to be cheaper to produce cars in Canada and that is why we had an auto industry. Now the WHOLE WORLD can produce cheaper than Canada, why would companies continue to produce here? If we want an auto industry to remain here, we need to compete in low cost, as low as those workers in third world countries. Without addressing the issue of high labor cost, any money throwing into the manufacturing sector is not sustainable. A government can’t tell investors to come in and then use legislature to lock them in here. That does not encourage investment, that only scares off investment. Companies make business decisions, not patriotic decisions because government doesn’t own companies, shareholders do. NDP, get real!

Let’s take a closer look at NDP’s plan:
- $4 billion over four years to help the auto industry design and produce environmentally friendly cars and trucks.
- $3 billion would go towards retraining workers for so-called “green-collar” jobs in the environmental industry.
- Adopting a made-in-Canada procurement for the federal government and its agencies.
- $400 million on a job protection commissioner charged with investigating major layoffs and plant shutdowns to prevent jobs from leaving Canada.

If the $4 billion is mostly in designing, not producing, environmentally-friendly cars, these manufacturing workers will not benefit directly and at most reap filter-down benefits. If the spending is mostly on producing without addressing the issue of labor cost, any initial production will eventually erode away to cheap labor overseas. It is simply not sustainable.

Simply tag on “green” does not make a job sustainable. Even if we have a “green” car ready to be produced tomorrow, the jobs will still eventually go overseas without addressing the high labor cost issue. Charging a premium on putting solar panels on the roof will make these alternative energy unattractive and not a sustainable business model. The list will just go on and on. Labor cost is an issue that unfortunately cannot and should not be addressed by government, but by the market.

“Made in Canada” policy sounds good for campaign, but what happens if Bombardier decides to charge the City of Toronto more for subway cars than Siemens? You get the idea.

Government can investigate why jobs are leaving Canada, but they are likely wasting their times. At the end of the day, jobs leaving Canada because of labor cost. It is one thing for a financially stressed company to simply declare insolvent to avoid severance. It is another if the company is making a legitimate business decision.

Workers must focus on retraining. There are more options that you think. Seek help from career counsellors.

Then don’t complain the government is out of touch with the people, because the leading party is not representing the people, they are simply the party that disgust you least. It’s time to vote for a party that you believe in (most)!