582,000 Canadian jobs would be lost with collapse of Big Three: report

Canada would lose 582,000 jobs within five years if the Big Three automakers completely shut down, according to a report prepared for the Ontario Manufacturing Council, a government advisory panel of industry and labour representatives.

The report, which was prepared by the Centre for Spatial Economics, projects a bleak economic picture for the province and the rest of the country if the automakers were to go out of business.

Effects on employment would be felt right away, the report states, with Canada losing 323,000 jobs if production ceased immediately, 281,800 in Ontario alone, the report forecasts. Those figures would climb in five years to 582,000 jobs nationally in 2014, 517,000 of those in Ontario.

A cut in production by 50 per cent would eliminate 157,400 jobs nationally immediately, 141,000 in Ontario. By 2014, 296,000 jobs would be lost, 269,000 in Ontario.

"The fact is that if this industry goes, it is going to involve a lot of people," said Rob Wildeboer, a council member and the executive chairman of Martinrea International Inc. "A lot of people that are going to be your neighbours, they're going to be friends, probably family members."

The depreciation of the Canadian dollar, lower interest rates and lower production costs would eventually help the economy to partially recover, but the loss of the Detroit three would leave a permanent dent in Canada's economy in terms of jobs and output, the document says.

The collapse of the Big Three would have far-reaching effects, including a reduction in production by the Canadian automotive parts industry of 80 per cent, the report predicts.

Aid needed to avoid 'doomsday scenario,' Bryant says

The Canadian subsidiaries of the Detroit Big Three automakers had asked Ottawa and Ontario for financial aid that could total as much as $6 billion.

Last Friday, the federal government and Ontario reached a deal to offer $3.3 billion to Canada's auto industry, contingent on the approval of  a proposed $14-billion US aid package in Washington.

Ontario Economic Development Minister Michael Bryant said the auto sector will get the help it needs from both the provincial and federal governments to avoid a "doomsday scenario."

"This report says that Canada is better off providing life-support to GM and Chrysler, because the demise of auto in Canada is the economic equivalent of a nuclear freeze, with catastrophic effects that would knock us into a deep recession," Bryant said Tuesday.

"We are talking about CPR, literally, CPR for a company to avoid it from going under and causing a chain of events that would be catastrophic to the economy."

The U.S. bailout package collapsed in the Senate. But the White House has said it is considering using money from the $700-billion US Wall Street rescue fund to support the domestic automakers.