VIA Rail

[evandyk]

If you dropped $13B in $100 bills from a helicopter over SWO it would probably create more jobs than this factory will. These programs normally end up costing hundreds of thousands of dollars per job created.

 

[kEiThZ]

If you dropped $13B in $100 bills from a helicopter over SWO it would probably create more jobs than this factory will. These programs normally end up costing hundreds of thousands of dollars per job created.

We can give people money to dig ditches and fill them back up to just create employment. That's not the goal though. The goal is to sustain an industrial base that creates high value employment with industries that offer substantial export potential. It's no different than the government supporting Quebec's aerospace sector or Alberta's oil sector or agriculture across the Prairies or the fisheries and offshore oil in the Maritimes.

It's particularly hilarious to hear that this is some deep right wing corporatist plot while arguing for absolute laissez-faire economics that would let communities get crippled. We're doing this precisely because decades of not having an industrial policy has not worked and left Southwestern Ontario with some of the worst economic and social decline in the country. Sorry that I don't share the same fully free market vision as you guys and the Fraser Institute.

 

[T3G]

I suppose we should anticipate that that $16 billion will all be paid back in due course from the profits this plant and company will bring in, and that we haven't just paid big public monies for a private enterprise to expand their business while they don't give anything back, right?

 

[DirectionNorth]

Why not subsidize a rolling stock factory? The cumulative loss of manufacturing jobs in SW Ontario includes a lot of jobs connected to railway manufacturing, like EMD in London. If the aim is preserving skilled manufacturing jobs, it shouldn't need to be tied to the automotive industry specifically.

I'm pretty sure we have.

Google "Bombardier Thunder Bay" and "UTDC" and you'll see where that went.

If you dropped $13B in $100 bills from a helicopter over SWO it would probably create more jobs than this factory will. These programs normally end up costing hundreds of thousands of dollars per job created.

I suppose we should anticipate that that $16 billion will all be paid back in due course from the profits this plant and company will bring in, and that we haven't just paid big public monies for a private enterprise to expand their business while they don't give anything back, right?

As @kEiThZ said, it's not only about job creation, but industry creation. Our economy is based off real estate extortion and raw materials, and other places are paying companies to set up EV operations there.

It sucks, but Canada is in desperate need of high value industry. Battery plants and car plants bring an ecosystem of resource extraction that also creates jobs. It's subsidies (crucially, the VW subsidy is tied to American subsidies - if they reduce their subsidy, we reduce ours as well) or nothing, and I'd rather have some semblance of a functional economy, please.

Ask yourself why Donald Trump's "the coal industry is back" was so popular, and why he won states like PA, WV, and OH.

Also, do we have an EV thread somewhere? We should probably move this conversation there.

 

[kEiThZ]

I suppose we should anticipate that that $16 billion will all be paid back in due course from the profits this plant and company will bring in, and that we haven't just paid big public monies for a private enterprise to expand their business while they don't give anything back, right?

The very fact that you think the federal and provincial government simply cut cheques for $16B to build a factory shows you don't understand the deal made at all.

$13B of that $16B is basically production subsidies that are specifically to match those being given by the Biden Administration in the US under the Inflation Reduction Act. If those subsidies are cancelled in the US (say by a future Trump administration), they will be cancelled in Canada too. The subsidies expire automatically shortly after the US IRA subsidies expire in the US.

It's unfortunate that the US decided to start a trade war that tried to repatriate manufacturing in a manner that targeted its friends, but this is the price of making sure SWO doesn't lose the hundreds of thousands of well paying jobs in the auto manufacturing sector as that sector transitions from ICEV to BEVs.

As for return on government investment. The government says they expect 3000 direct jobs and $200B in lifetime economic activity from the St. Thomas plant VW plant. If their estimate is even half true, the tax receipts from that economic activity should pay for their subsidies.

Now. If you want to discuss economic and industrial policy, let's start another thread. We're well off-course for a discussion on VIA Rail.

 

[kEiThZ]

Our economy is based off real estate extortion and raw materials, and other places are paying companies to set up EV operations there.

Real estate ponzi and fleecing international students is basically the GTA economy at this point. It's all Torontonians understand. So now we insist the rest of the country also build the same crappy economy where the only options for work are Starbucks Barista or RE/MAX agent. Apparently, actually building stuff should be left to the grown up countries that we ship all our commodities to.

 

[Frank_Lee]

Supporting manufacturing doesn't have to mean supporting automotive manufacturing. Improving our ability to retain the kinds of high value added manufacturing that other rich countries do (e.g. Germany, Japan, Switzerland) requires a lot more than just throwing money at carmakers, like improving and expanding the trades system and changing the emotional valence around it, so that smart talented kids don't look down on becoming machinists and choose to become software developers.

As Urban_Sky brought up, supporting the domestic railway industry by actually buying its products should probably be a concomitant step to building new infrastructure. Buying high value domestic products is the American Defense Department's approach to industrial policy.

Real estate ponzi and fleecing international students is basically the GTA economy at this point. It's all Torontonians understand. So now we insist the rest of the country also build the same crappy economy where the only options for work are Starbucks Barista or RE/MAX agent. Apparently, actually building stuff should be left to the grown up countries that we ship all our commodities to.

 

[kEiThZ]

Supporting manufacturing doesn't have to mean supporting automotive manufacturing.

It doesn't have to. But it isn't easiest to build on a sector that already exists. This is called comparative advantage.

Improving our ability to retain the kinds of high value added manufacturing that other rich countries do (e.g. Germany, Japan, Switzerland) requires a lot more than just throwing money at carmakers, like improving and expanding the trades system and changing the emotional valence around it, so that smart talented kids don't look down on becoming machinists and choose to become software developers.

Your three examples are hilarious. Two of them have very high dependence on auto manufacturing and are subsidizing auto manufacturing a lot more than we are. The third is dependent on substantial arms sales and money laundering (eeer "tax avoidance"). Really great examples for us to follow. /s

You're right that we could and should do a better job with how we train young people for the workforce. Not sure what that has to do with job creation though.

As Urban_Sky brought up, supporting the domestic railway industry by actually buying its products should probably be a concomitant step to building new infrastructure.

We have done that for decades. Why do you think you're riding Bombardier subway and streetcars in Toronto? But coachbuilding will never have the export (and therefore job creation) potential that building autos for American market will.

Buying high value domestic products is the American Defense Department's approach to industrial policy.

Can't wait to hear what you'd say if we ramp up defence spending to the same percentage of GDP as the US.

Oh and transit vehicles aren't really "high value". They are mostly welded steel boxes with some power and control electronics. That's a whole lot different than say a jet turbine which has enough high skilled labour involved that it's worth its weight in gold, literally.

 

[dowlingm]

transit vehicles aren't really "high value". They are mostly welded steel boxes with some power and control electronics. That's a whole lot different than say a jet turbine which has enough high skilled labour involved that it's worth its weight in gold, literally.

Not sure I can endorse that. Isn't it fair to say that transit vehicles of recent vintage (e.g. C/ALRV) aren't sticking around as long as heretofore (e.g. PCC) in part because the control electronics can't be serviced, either because the skills or designs are lost and would have to be regained, or it's simply cheaper to acquire newer gen tech (which in turn will be cleverer but at the same time even more riddled with electronic bits and bobs)

Even passenger coaches now have more tech in them whether it be monitoring systems, door controls, wifi, USB ports, whatever. A bit different to stripping and patching a Budd coach.

 

[Frank_Lee]

It doesn't have to. But it isn't easiest to build on a sector that already exists. This is called comparative advantage.



Your three examples are hilarious. Two of them have very high dependence on auto manufacturing and are subsidizing auto manufacturing a lot more than we are. The third is dependent on substantial arms sales and money laundering (eeer "tax avoidance"). Really great examples for us to follow. /s

You're right that we could and should do a better job with how we train young people for the workforce. Not sure what that has to do with job creation though.



We have done that for decades. Why do you think you're riding Bombardier subway and streetcars in Toronto? But coachbuilding will never have the export (and therefore job creation) potential that building autos for American market will.



Can't wait to hear what you'd say if we ramp up defence spending to the same percentage of GDP as the US.

Oh and transit vehicles aren't really "high value". They are mostly welded steel boxes with some power and control electronics. That's a whole lot different than say a jet turbine which has enough high skilled labour involved that it's worth its weight in gold, literally.

The American defense department purchases a lot of American made defense products, allowing the domestic industry to acquire the economies of scale and leading edge technology that have made it a very successful export industry. This is not so different than what we're talking about with the battery industry, except the subsidy is implicit in the form of government demand.

The training aspect has to do with our lack of labour productivity. Manufacturing in Germany (which is far larger than just the car industry) is founded upon the existence of a very high quality workforce of skilled tradespeople.

 

[kEiThZ]

Not sure I can endorse that. Isn't it fair to say that transit vehicles of recent vintage (e.g. C/ALRV) aren't sticking around as long as heretofore (e.g. PCC) in part because the control electronics can't be serviced, either because the skills or designs are lost and would have to be regained, or it's simply cheaper to acquire newer gen tech (which in turn will be cleverer but at the same time even more riddled with electronic bits and bobs)

Even passenger coaches now have more tech in them whether it be monitoring systems, door controls, wifi, USB ports, whatever. A bit different to stripping and patching a Budd coach.

Having advanced technologically compared to the past doesn't substantially make something high tech. Nor does adding wifi and USB (I almost thought you were trolling with these suggestions as high tech).

Also the discussion was more about the value chain involved in their construction and its relevance to employment. There will never be enough coachbuilding demand in Canada to create as many jobs as the auto sector in Canada.

 

[kEiThZ]

The American defense department purchases a lot of American made defense products, allowing the domestic industry to acquire the economies of scale and leading edge technology that have made it a very successful export industry. This is not so different than what we're talking about with the battery industry, except the subsidy is implicit in the form of government demand.

I assure you I'm more than familiar with American defence procurement. More than just about anybody on this forum. That model doesn't automatically apply to any and every sector. There has to be a substantial need to justify that model. Supplying transit vehicles is not in that category. And will never be in that category.

Also, the US is not trying to innovate batteries. It is trying to prevent a massive erosion of its auto sector by the rise of Chinese EVs. They are doing this by offering massive incentives to repatriate auto assembly and ramp up domestic battery manufacturing. If Canada, did not match those incentives, by the end of this decade we could have easily seen a six figure number of jobs in peril. There isn't enough rail vehicle demand in North America to replace those jobs. Let alone Canada. And certainly not for another quarter century.

The training aspect has to do with our lack of labour productivity.

Our lack of labour productivity stems from our reliance on low productivity activity. Like the housing ponzi. It isn't about training. And no amount of training will bring in manufacturing jobs to Ontario, if some American or Mexican state is willing to pay a manufacturer billions in subsidies and allow lower wages.

Manufacturing in Germany (which is far larger than just the car industry) is founded upon the existence of a very high quality workforce of skilled tradespeople.

You should look up what percentage of Germany's GDP is dependent on auto manufacturing before you continue using it as an example, while railing against subsidizing auto manufacturing.

 

[dowlingm]

Having advanced technologically compared to the past doesn't substantially make something high tech. Nor does adding wifi and USB (I almost thought you were trolling with these suggestions as high tech).

Also the discussion was more about the value chain involved in their construction and its relevance to employment. There will never be enough coachbuilding demand in Canada to create as many jobs as the auto sector in Canada.

Should you re-read my post you will note I merely said "tech". Even low tech with sufficiently dense and/or complex wiring paths increases the cost of mid-life refits. It doesn't need to be a missile guidance system to need careful work and protection from leaks/spills/impacts.

 

[micheal_can]

We have done that for decades. Why do you think you're riding Bombardier subway and streetcars in Toronto? But coachbuilding will never have the export (and therefore job creation) potential that building autos for American market will.

The only way the government could make the argument to "invest" in Canadian rail coach building would be if Via and other rail companies were in a state of growth and expansion. If Via were to expand frequency along their existing routes and add more routes and continue to add more routes and more frequency, then it would be feasible to invest in building a facility to build those coaches. Since that is not on the horizon, there is no real point in the government doing it.

 

[Urban Sky]

You should look up what percentage of Germany's GDP is dependent on auto manufacturing before you continue using it as an example, while railing against subsidizing auto manufacturing.

Just to provide some figures: the German automobile sector accounts for 5% of GDP, but represents 19% of gross value added. It has recently promised subsidies worth 902 million Euros (C$1.3 billion) to have a a Swedish battery maker built his plant in Germany and not the US and 9.9 billion Euros (C$14.5 billion) to have Intel build a semiconductor factory in Germany, as well as 5 billion Euros ($7.3 billion) to TSMC to do the same.

In short: Germany, with an Economy approximately twice as large as Canada, is spending about twice as much to host high tech plants…