OTTAWA - The federal government won't be writing big cheques to help the battered manufacturing and forestry sectors, although some help for retraining may be coming, Finance Minister Jim Flaherty said Wednesday night.
"I don't believe in corporate welfare and I don't believe in shoring up failing businesses...but in science and technology, in research and technology, we can help some sectors of the economy become more competitive,'' he said.
The finance minister made the comments after emerging from a two-hour meeting with provincial and territorial finance ministers, who had requested the session to deal with growing crisis in export-oriented industries hammered by the high Canadian dollar.
The meeting yielded no concrete concessions from Ottawa, although Flaherty said he is "looking at some measures we might be able to do, specifically with respect to forestry and the auto sector.''
But hand-outs or targeted aid to hard-pressed industries and sectors would be a temporary solution that would not rescue unsustainable businesses, he said.
"I'm not a Band-Aid solution kind of finance minister, quite frankly,'' he said.
Two areas the minister said he is willing to consider for his next budget in early 2008 is labour retraining and labour mobility, particularly in one-industry towns where the only plant has shut down, and restructuring help for businesses to modernize and become more competitive. He offered no specifics.
The response did not impress Quebec finance minister Monique Jerome-Forget, saying what her government is doing is not Band-Aid, but designed to rescue a sector for the long-term.
She said the manufacturing sector needs help now to survive a period of currency volatility and that Ottawa can play a role in the measures being put in place in her province, such as R&D grants, funds for retraining, and giving businesses "breathing room'' by permitting taxes to be paid in instalments.
"There are a number of things that we can do,'' she said. "We have the manpower, we have the resources, we should be able to save a fair amount of that manufacturing sector.''
Ontario's finance minister, Dwight Duncan, is expected to announce a $40-million rapid retraining program for workers who have lost their jobs because of the economic challenges when he tables Ontario's fall economic update Thursday afternoon. Duncan did not attend the meeting in Ottawa, sending his legislative assistant to fill in.
Flaherty disputed claims from provinces that Ottawa is not doing enough, pointing out that in last spring's budget he introduced a $1.3 billion measure to allow manufacturers to write off the cost of new equipment and machinery. And he said he introduced $60 billion in tax cuts on Oct. 30 that will help the businesses for the long term.
"These are historic tax reductions and I encouraged my provincial and territorial colleagues to follow suit to reduce taxes on manufacturers in Canada if they really want to give manufacturers an opportunity to become more productive,'' he said.
