TORIAL

We could see the
recession coming

ne

HERE is no consolation in saying that
over two years ago IWA-CANADA began a
dy long exchange of letters between the union
| __ and Bank of Canada governor, John Crow
t _ and Finance Minister, Michael Wilson, in
|

which the union warned of the potential

gloom and doom in the forest industry

| from the government's high interest rates
——1 policy.

For the thousands of IWA-CANADA members and
other workers who have lost their jobs and are having
their lives ruined by the economic recession and
depression, there’s little comfort in saying “we told

ou so.”

a It wasn’t until mid-October that Michael Wilson
even mentioned the word “recession” in the House of
Commons, well after opposition parties and the Con-
ference Board of Canada accused the Tories of being
responsible for a “made in Canada” recession. The
Conference Board predicts that inflation will reach
6.4% in 1991 which will cause Crow to further increase
interest rates.

Crow has singlemindedly, since his appointment in
February of 1987, seen the raising of interest rates as
a tool of economic management. He has jacked up
interest rates to ostensibly keep inflation under con-
trol. During his three years of Bank Governor, at least
$21 billion has been added to Canada’s nearly $400
billion long term debt, just to pay the 6 percentage
point rise in interest rates caused by Crow.

Crow and Wilson have paralyzed the Canadian econ-
omy. According to Stats Canada over 152,000 jobs in
manufacturing sectors have been lost in the 12
months ending June 1990. One hundred and ten thou-
sand of these lost jobs were lost in Ontario and
Quebec.

The impact of high interest rates on the forest
industry has been devastating. Firstly, it greatly
reduces the overall demand for wood products in com-
mercial and residential construction.

Secondly, interest rates drive up the value of the
Canadian dollar which in turn makes it harder to sell
our forest products on the international market, and
thirdly, high interest rates greatly increase the cost of
capital in forest industry operations. We are now
paying 50% more than our U.S. competitors which is
an extra handicap in the market place.

In the past 3 months over 8,000 IWA-CANADA
members have lost their jobs in a series of shutdowns,
layoffs and permanent closures. And there seems to
be no light at the end of the tunnel.

But Crow has supported a high Canadian dollar and
has bragged that our over-inflated buck has made
prices of imports fall, thus easing inflation. But now,
lo and behold, that we are in a recession, Crow
remains adamant in his high interest policy. He has
even warned the Bank of Canada’s Directors that the
country will face another round of his high interest
rates policy if the Goods and Services Tax is imple-
mented and rising world oil prices threaten the
economy.

So for the foreseeable future Canada is stuck with a
Bank of Canada Governor who will maintain high
interest rates and prolong the economic recession.
Crow seems bent on “a zero rate of inflation” which
has tightened up the money supply in Canada more
than by another central bank in the Western World.

The regulation of interest rates should be adminis-
tered as a matter of public policy and not left to the
whims of someone like John Crow who is insulated
from the devastating effects his policies are having on
Canadian workers.

LUIMBERWAORKER

Official publication of [WA-CANADA

NORMAN GARCIA, JACK MUNRO. . President

Editor GERRY STONEY . . Ist Vice-President
NEIL MENARD... 2nd Vice-President
5th Floor, FERNIE VIALA . . 3rd Vice-President
1285 W. Pender Street BILL POINTON .. 4th Vice-President
Vancouver, B.C. ROGER STANYER. . 5th Vice-President
V6E 4B2 TERRY SMITH. . Secretary-Treasurer

BROADWAY

SOS privrens iro

4/LUMBERWORKER/NOVEMBER, 1990

GENTRE FOR
ECONOMIC POLICY.
ENFORCEMENT

OUR MOTTO
5 2)

Brian hiawsLa

THIS IS GOING TO
HuRT YOu MORE THAN
\ IT WILL HURT ME!

eo” RIE POR THe LUMBERWORICER

Brazen Tory government joins
trade talks with U:S.-Mexico

At this point in time most
Canadians appear oblivious
to the fact that our Federal
government has announced
that it intends to join trilat-
eral trade talks with the
United States and Mexico.

The recession that we are
getting into deeper every day
has overshadowed this new
development which will have
a tremendous impact on our
future.

One day in September
before U.S. President George
Bush announced that he will
be seeking Congressional
approval for such a deal, our
Federal Trade Minister John
Crosbie announced Canada’s
intent to join talks in estab-
lishing a North American
Free Trade zone.

Under provisions of the
U.S.’s Omnibus Trade and
Competitiveness Act passed
in 1988, Bush could “fast
track” the negotiations and
we could be part and parcel of
a deal by the end of next year.

Mexico is laden with a for-
eign debt of over $92 billion
U.S. and has begun swapping
its debt for equity in its econ-
omy. Mexican President Car-
los Salinas de Gortari has
lowered tariffs unilaterally
and has eliminated or reduced
public ownership of the do-
mestic economy by decree.

Economic development over
the past 10 years has seen the
emergence of the “Maquila-
dora” manufacturing zones in
Northern Mexico which have
become a extension of the
US.’s manufacturing base.
These zones have allowed for
the import of raw materials
into Mexico in exchange for
the free export of finished
goods back into the U.S.

Companies such as Ford
Motors, Kodak, IBM and
Whirlpool Appliances and
many others have jumped at
the opportunity to exploit
cheap labour which provides
for only $3.25 (U.S.) per day
in wages to the Mexicans.

These multinational corpora-
tions and many others have
sought haven in Mexico to
maximize their profits while
providing workers with ap-
palling working conditions.

Unemployment in the cor-
rupt, authoritarian nation of
Mexico is in excess of 20 per-
cent or 17 million people. In
the Maquiladora trade zones
approximately 80% of work-
ers are female between the
ages of 17-25 where annual
turnover in many plants
exceeds 100%.

Mexican workers have nev-
er been entitled to unemploy-
ment insurance, health care
insurance or any of the mini-
mal social guarantees that
Canadians enjoy.

Multinational
corporations are
gearing up to
exploit the
corrupt
Mexican labour-
management
system

Although it is estimated
that between 19-20% of the
workforce is unionized, nearly
all labour centrals are part of
an umbrella organization
which is called the Congreso
del Trabajo (CT).

The CT is structurally tied
to the PRI, which is the rul-
ing part in Mexico.

According to a study spon-
sored by the Canadian Lab-
our Congress, there is little
evidence to suggest that Mex-
ican trade unions are a pro-
gressive force. The unions
negotiate protective contracts
for their employers and do not
clearly advocate higher wages
or job security for their
members.

A study revealed that in
the auto industry, union
wages were lower than the
non-union sector and turnover
rates in the organized sector
were 17% per month!

Multinational corporations
are gearing up to further
exploit this body of poorly
represented workers. And
yes, Canadians will be forced
to compete with this corrupt
Mexican labour-management
system in the future.

In one of the most brazen
statements ever made by a
Canadian politician, Trade
Minister Crosbie said Cana-
dian workers hurt by the
upcoming deal will be pro-
tected. In early October,
before a House of Commons
committee, Crosbie said there
“will have to be safeguards
and (in) certain areas there
will be a phase-in over an
extended period of time.”

Such words are very vem @
niscent of Mulroney's broken
promises that Canadian work-
ers would be compensated for
job loss due to the Canada-
U.S. Free Trade agreement
signed in January of last year.
Despite the loss of over
150,000 jobs, the federal gov-
ernment has done nothing to

compensate or protect Cana-
dian workers.

U.S. President George
Bush has been pushing the
Mexican government to in-
clude Canada in the trade deal
and is almost certain to insist
on our participation.

Among Canada’s economic
sectors to be targeted in the
talks will be agricultural
trade, textiles and develop-
ment in the petrochemical in-
dustry.

The Bush Administration
will likely kick off talks with
Mexico in May of 1991. From
now until that time, Cana-
dian labour will have time to
coordinate a fightback pro-
gram against the deal.

3