Hey there, time traveller!
This article was published 18/7/2010 (2506 days ago), so information in it may no longer be current.
A year ago, I drove around Ontario to check the health of its industrial heartland. The prognosis was not good. Today, I'm checking back. The prognosis is still bad.
A big part of the problem is the federal government's uncertain handling of major foreign takeovers.
Sudbury's massive nickel mine has been enervated by the United Steel Workers Union's year-long strike against the mine's owner, Vale SA, the world's second largest mining company.
United States Steel Corp. is in a court battle with Ottawa, which says it broke promises it made when it bought Hamilton's Stelco, Canada's largest steel-maker.
There's more. Ottawa's ham-handed attempts to sell AECL, once Canada's nuclear industry jewel, got even worse when two potential clients, New Brunswick and Ontario, said they were not going to buy reactors from the Crown corporation.
Finally, foreigners have pretty much picked clean the bones of Nortel, Canada's leading telecom producer before it went broke.
Ottawa's fumbling on foreign takeovers became clear in 2006 when Vale paid $19.4 billion and took over Inco.
It was obvious the Steelworkers, a tough North American union, and Vale, a company dominated by Brazilian aristocrats, were not going to get along. Last year, flamboyant company executive Roger Agnelli said the Sudbury operations were "not sustainable" unless workers accepted major wage and benefit concessions. The strike started on July 13, 2009.
One reason it lasted so long is that Sudbury was critical to Inco, but it's much less so to Vale and its world-wide operations.
The strike, the longest in the Sudbury operation's history, ended this month when the union and company watered their wine. The future, however, is uncertain. Wayne Fraser, director of the Steelworkers' district that includes Sudbury, says Canada's mining industry is fundamentally at risk under foreign ownership.
"It's a sad day that workers have to walk the picket line for almost a year to fend off the attack by a company like Vale," he says. "It's unconscionable that they have to do that." No mention that the Steelworkers' international head office is in the U.S.
Ottawa has taken a different approach to the case of United States Steel's Canadian operations. Steel bought Stelco in 2007. Not long afterwards, it laid off or retired 2,400 workers and scaled back production at the two former Stelco plants in Ontario.
U.S. Steel said the cuts were necessary because of the global recession. Too bad, said Ottawa, but you promised to maintain employment, boost production and ensure the takeover was a "net benefit" to Canada as required by the Investment Canada Act.
In an unprecedented move, federal Industry Minister Tony Clement last summer took U.S. Steel to court. Ottawa won its case, but U.S. Steel is now appealing. One reason: U.S. Steel says fines under the act are of the King Kong variety.
Ottawa's handling of AECL is just a mess. It dithered around before deciding to sell the Crown corporation. But during the period of uncertainly AECL was not able to complete its next-generation Candu reactor and lost its key clients. A nuclear reactor developer is not worth much if he doesn't have any future contracts on its books.
At Nortel, Ottawa stood by while the company, which had fostered a lively telecommunications business in Canada, collapsed. The big losers were Nortel's pensioners, who were worried that they were going to get cut off.
So, there you have it. Ottawa's industrial policy ranges from Mr. Meek to Mr. Mean and Mr. Dithers.
You can take your pick.
Tom Ford is managing editor of The Issues Network.