Read the bad news here care of the Toronto Star.
517,000 Ontario jobs at risk
If Big Three automakers go out of business, the entire economy will be devastated, report says
Robert Benzie and Rob Ferguson
Queen's Park Bureau
Dec 16, 2008
Ontario would lose 517,000 jobs within five years if the Big Three automakers went out of business, according to a new provincial report obtained by the Star.
The review, prepared for the Ministry of Economic Development and to be released today, warns the collapse of General Motors, Ford and Chrysler would send lasting shock waves through the economy.
If auto output by U.S.-based manufacturers in Canada were cut in half, at least 157,400 jobs would be lost right away, 141,000 of them in Ontario. By 2014, job losses would rise to 296,000 nationally, including 269,000 here.
If production were to cease completely, 323,000 jobs would be lost immediately in Canada, including 281,800 in this province, rising to 582,000 nationally and 517,000 in Ontario by 2014.
"This report suggests that even under a scenario where half the auto sector is lost, our economy (in Ontario) basically craters and brings the whole rest of the (Canadian) economy with it," Bryant said.
The damage would extend well beyond the auto and related parts industries to housing and a broad range of consumer spending, said Jayson Myers, an economist who is president of Canadian Manufacturers and Exporters.
Nor could Japanese-based automakers like Toyota and Honda, which already build cars and trucks in Ontario, be expected to fill the void left by GM, Ford and Chrysler.
If Ontario does lose 517,000 over five years (582,000 nation wide) that number is almost equivalent to the number of immigrants who will settle in the province over the same time period. Ontario will be increasing its working population in tandem with a decrease in the number of jobs available in the labour market. Essentially we we will be importing unemployment.
Which reminds me. Remember last year or maybe a year and a half ago or was it two years ago that we were told that we needed more immigrants, particularly non-English speaking illegal immigration from Portugal, to fill vacancies in the construction industry? It's turning out we really don't need them that desperately anymore. Predictably, like the dot come bubble Toronto's condo boom is heading for a bust.
By the end of September, there were 33,919 condos under construction in the Toronto metropolitan area – more than three times the city's annual average – said economist Will Dunning in a report on the rental and condo markets.
"This very large pending inventory is setting the stage for a substantial correction," Dunning said in an interview yesterday.
The warning comes on the heels of figures yesterday showing sales of existing homes in Canada continued to slide in the year's fourth quarter. Declines were steep amid the lowest level of monthly activity in almost eight years as investors worry about the faltering Canadian economy.
"In the short term, condos are the most vulnerable aspect of the market," said CIBC World Markets senior economist Benjamin Tal. "I think there is a lot of oversupply, especially in cities such as Toronto and Vancouver."
Already, some prominent developers have warned some condo projects being marketed may not make it to completion. In a tight credit market, as falling sales hit the new home market, speculators and investors take cover.
"It appears that this process – excess supply in the condo sector and owners acting to sell the units – may be underway already."
The above story can be read in the "Gee, I didn't see that coming" section of the Toronto Star. (Market analysts with Economics PhDs, what would the world do without them?) I remember in the midst of the dot com bubble Canadians were being told that we needed more immigration to fill projected, meaning assumed, vacancies in the IT sector. Now an IT specialist from India can't get arrested in this town yet we still hear calls for more immigration. After the dot com bust it was the condo boom. What's next?
Doom and gloom economic projections are just as reliable as bullish market forecasts. Neither may come to pass becuase like I said it is all guess work.
What is clear now more then ever is that Canada has to reduce its immigration intake, if the country is unwilling to halt all immigration to the country temporarily, to weather the economic downturn. It is only fair to Canadian workers and their families. To continue to allow an unacceptably high number of immigrants into the country especially in these dire economic times smacks of indifference to the plight of many hard working Canadians. It is a direct assault on their standard of living and their national birthright. I cannot see how one could still say the nation needs to import so many people when laid off Canadians can be retrained to fill vacancies in other sectors of the economy. Allowing so many people from outside the country to settle in Canada at this time can only make the situation worse.