The land of Canadian Tire, Tim Hortons and Michelle Creber has yet another thing going for it: Their auto workers have a cost advantage over their two-tiered brothers and sisters down south according to a study from Toronto, Ontario-based Scotiabank.
In the report, Scotiabank chief economist Carlos Gomes explains that, as a result of the recent Unifor contract, new hires to Canadian assembly plants are more cost effective than those brought on board in United States-based facilities. The price tag? $37 for a U.S. new hire versus around $30 (in USD) for a Canadian new hire.
Furthermore, while someone screwing together a Camaro will reach parity with older workers in 10 years’ time, a new hire building Escapes will remain below senior workers for the entirety of their career. A weaker Canadian dollar, pegged at 96 cents USD as of this writing, also adds to the Great White North’s competitive streak.
With the threat of overcapacity and bottlenecks looming over the North American auto industry, along with increased demand from global markets, automakers are looking at what they can do to keep the machine running. For Ford, it means a $700 million investment in the retooling of its Oakville plant to build crossovers for export markets, while for General Motors, it means delaying the shutdown of their Oshawa plant until sometime in 2016. And of course, according to Gomes, Canada can begin to diversify its automotive exports beyond the NAFTA zone, a result of signing a free trade agreement with the European Union.