Tuesday, March 10, 2009

Stimulate this!

The President of Ford Canada, David Mondragon, has it absolutely right when he says that governments should be stimulating demand and not production.

The auto industry will not be salvaged by CAW or anyone else accepting a $7 an hour wage concession. To get serious, governments need to provide scrappage fees to get old vehicles off the road, offer deep tax breaks on new vehicle sales (starting with 0% GST, and provincial sales tax breaks), and other innovative ideas. How about tax-free RRSP withdrawals up to $20,000 to purchase a new or used vehicle?

To simply enable manufacturers to produce their vehicles more cheaply is nonsense. Parking lots full of dusty Impalas or Chargers will do no one any good. 

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