rabble.ca Canadian federal election blog

The ballot question - protecting Canadian jobs

By Dave Coles

The financial crisis is not simply about banking.  There are many companies that face imminent collapse because they will not be able to maintain operations without refinancing their capital structure.

The forest industry is the front line in this crisis.  Forestry has been the industrial sector most affected by the mortgage crisis and deflation in the US housing market.  The nationalization of US financial institutions and mortgage companies, even before the $700 billion bailout, addressed the housing market, and hence forestry.  What has the Canadian government done?

But the present crisis goes far beyond the US housing market.  Leveraged private equity in Canada is weighted down by billions in debt.  The private equity buyout of Canada’s largest company, BCE, was $58 billion, of which $33 billion was debt.  Our largest forest company, AbitibiBowater, is compelled to refinance $1.1 billion in short term debt by July 09.  If the financial crisis and a recession in the Canadian economy renders it impossible for these debts to be managed, there will be a wholesale destruction of productive assets in Canada, and a wave of unemployment.

This week my union released a poll by Nanos Research that showed that 60% of Canadians approve of direct financial assistance by government to prevent the failure of major forest companies.  In Quebec, this approval rate is over 80%.   I am not advocating corporate give aways – this is about keeping Canadian production up and running during a recession in which no one yet can see the bottom.

Most Canadians understand implicitly the uncharted economic territory we are entering.  That is why Conservative support is plummeting, and why the foregone conclusion of two weeks ago that Stephen Harper would re re-elected is now very much in play.  In the next seven days, we need a national discussion, worker to worker and neighbour to neighbour, about the need for government to do what the financial markets are unable to do  - to protect Canadian jobs and productive capacity.

Canadians are talking about the economy and they want a government that will act during the coming recession.  That is why Harper may lose this election.