Manufacturing: Why Mexico is eating Canada’s lunch

More than 600,000 jobs from Canada’s central industrial heartland have been lost in the past dozen years—many of them shipped offshore. Grohe Canada is just one of the latest manufacturers to follow suit, moving 200 jobs to Monterrey—one of the most dangerous cities in the world.

“…Laura Macdonald, an expert in Mexico-Canada relations at Carleton University in Ottawa, agrees that NAFTA has failed to improve protections for Mexican labour. It’s bad enough, she argues, that Canada failed to ensure that NAFTA’s labour provisions were implemented, which would have helped Canadian workers compete. As well, over the past decade, Ottawa has quietly defunded programs designed to help Canadian unions bolster labour conditions in Mexico and other countries, while also channelling development money toward support for Canadian mining corporations in those countries. “It would have been in our best interests to promote labour rights in Mexico,” Macdonald says, noting that Mexico’s repressive labour regime amounts to a highly lucrative government-backed subsidy for employers there. “It would have helped prevent the race to the bottom we’re now seeing, where wages are even lower than in China, and labour leaders who take militant positions risk being murdered.”

Data published by the Vancouver-based Fraser Institute, no friend of unions, reinforces Gómez and Macdonald’s characterization of the Mexican labour climate. In its 2014 Economic Freedom of the World report, the institute ranks Mexico 115th among nations for the integrity of labour-market regulation (Canada and the U.S. are both in the top 10). According to the report, the security of collective bargaining has significantly deteriorated since NAFTA was signed.”


Pic- courtesy Ontario Rustbelt.

  • john s

    It is pretty moot. No amount of Canadian encouragement of unions is going to change the mexican labour situation to the point where Canadian labour can compete. Why is it that people still act surprised by the consequences of NAFTA? Anyone with common sense could have and did predict these sort of things.

  • WalterBannon

    Look no further than the Dalton/Wynne govt and their energy policy. Ontario did OK for decades with higher labor costs thanks to low low energy prices. In one swoop Wynne and Dalton wiped out that last leg we had to stand on. But don’t expect anyone from Carleton to point that out.

    • That among a slew reasons has made Ontario a rusty place.

  • DMB

    Canada still gets many temporary foreign workers from Mexico working in manly farm labour jobs and they come here become they make more money here working a seasonal job than they would in Mexico in a manufacturing job.