The public administration in Canada has been reported to be playing an active role in the public service so that the nation’s public affairs can be managed with more accountability and democratic touch. From my research I can comfortably take a positive stand on the effect that the said public policies have on the Canadian Automotive Industry, even though, more can still be done. The Automotive Industry is the Key engine sector on which the economy of Canada relies. Therefore if not handled with caution, the whole country can find itself being brought down on its knees economically.
That is the reason why it is a vital requirement that all the stakeholders are brought into a round table discussion to aid any policy formulation that would affect this sector. The stakeholders include the manufactures, assemblers, suppliers and employees. They are required to closely work with the government to create an environment which can favor automotive business investments. Despite the notable effort of this sector, the policies that have been put in place by the government are not favoring the players in this industry to the full extent as would be expected of country like Canada (Brooks, 2007, p. 43-45).
Richard argues that the policies in place have overlooked the importance of Large Scale Investment and Regulatory Harmonization. With the changing motor vehicle technology, the Canadian Policies on this sector need to be revolutionized so that industry can remain competitive in the global market. To get a glimpse of how much Canada depends on this industry Richard further presented these findings in his research. He stated that by the year 2006, 150, 000 Canadians depended directly on motor vehicles while another 250, 000 of them did so indirectly i. e. through wholesaling, leasing, or in motor vehicle retail works.
The challenges that face this sector have been mainly as a result of globalization and the subsidies imposed on the country by the United States, not to forget the stiff competition from high quality automotive producers like Mexico, Japan and China (Watson, 1998, p. 199-207). Analysis The process of formulating a Public policy in Canada follows three distinct steps.
That is, agenda setting (government officials and the relevant agencies meet to discuss the problem); then option formulation (weighing of various alternatives by which the problem can be approached) and finally implementation phase (effecting the decision made to the interest of the public). Under the Automotive aspect, the policies would be the ones touching on the vehicle standards, safety and environmental effectiveness. To this effect, the Canadian Federal government has proposed an amendment to the Safety Regulation which has put their passenger cars at bumper with the U. S vehicles.
Subsidy Categories that the Canadian public policy provide are in terms of Direct Subsidies (Conditional and Unconditional Transfers), Tax Expenditures (Tax rate lowering, Tax deductions, Exemptions and tax Refunds), Free/Low Interest Loans and other monetary involvements (Watson, 1998, p. 209-218. Out of these there are those concepts that are beneficial and other which are detrimental to the industry in question. Some of the Public Policy in Canada under the automotive manufacturing sector (basically referred to as the Transport Sector) that is already in force is as follows.
ecoAUTO Rebate Program (Provision of rebates for the acquisition of fuel efficient vehicles or instead a long term lease of the same); ecoENERGY for Equipment (adaptation of energy efficient technology/equipment); ecoENERGY for Fleets (Awareness to feet owners on the importance of reduced fuel consumption and gas emissions); ecoENERGY for Personal Vehicles (Encouraging the owners of private vehicles to employ energy conservation strategies by availing funds to such willing individuals); eco Transport Strategy (Geared to protect the health of Canadians from environmental impacts in the Transport Industry); Turning the Corner-To address greenhouse gas emissions and air pollution; Voluntary agreement on fuel efficiency of vehicles (Aimed at reducing greenhouse gas emissions by 150 megatonnes and air pollution by 165 megatonnes by 2020); Capital Cost Allowance System and finally the Program of Energy Research and Development-PERD-Regulating the fuel consumption standards for a given class of vehicles provided in the ! 982 Act).
Others which are in their planning phase (not yet implemented) include:-National Vehicle Scrappage Program (the government is offering incentives to those individuals who are willing to do away with their old cars and instead acquire less efficient ones); Motor Vehicle Fuel Consumption Standards and the Public Transit Capital Trust (Supports the capital investment in public transport in terms of infrastructure and lane expansion) (Burke et al, 2000, p. 117-129). As time advances, so are the old policies rendered obsolete, thus calling for a continuous review of the same.
Canada has identified this course and has therefore committed themselves to seeing into clarifying subsidies so that they can remain to be strong to level its trading partners like U. S, Japan and the European Union. All vehicles that need to use the Canadian public roads have to be first insured, and going by the reports in (Jackson et al, 1997, p. 242-260) it can be said that this policy is hurting the industry. Jackson holds it that the public policy instituted in Canada to guard the public safety from vehicles is more of a death trap due to the numerous accidents that occur in the country. The reason as to this occurrence is because the country provides public auto insurance as opposed to many others that offer insurance on a more private basis.
Canada and the WTO entered into a pack of agreement in the year 1994, a move that was meant to give Canada a boost in the international competition and counter the unilateralism by the U. S as well as offer it a mechanism to address the resultant disputes. The political elites believed that the step that was taken to enter into the agreement with WTO was going to present great benefits to Canadian small and medium scale traders, who have all along been disadvantaged. During the Uruguay Round debate, the Canadian House of Commons deliberated on a move that went deeper than the merits and demerits of establishing trade regimes they discussed and gave recommendations to be implemented by the countries leadership regarding the automotive manufacturing industry.
The agreement was that the WTO would on top of other steps reduce tariffs for the manufacturing industry as well as open up investment opportunities for the Canadian automobile products into the developing world (beyond the boarders of United States). The WTO also provided for an Auto Pact which provided for a sectoral free trade on cars and car parts. The agreement with the United States which was also meant to help Canada establish a strong manufacturing base in a tiny domestic market also proved to be a great leap forward (Crane, 2009, 7-14). The policies that are currently in place were established with the notion that it the Canadian companies, not the country itself were in competition in the global market arena.
It is a fact that it is the individual companies that do deliver goods to the market, but it is the responsibility of the government to formulate policies within which these companies will operate. Therefore if the policies are oppressive, the companies are bound to fail in their service delivery and vice versa. The failure by the WTO to agree on some two policies provided in Article 6: 1 Article 8: was a big blow to the automotive manufacturing industry. Article 6: 1comtained clauses which could help in dealing with challenges emerging in the export market, reinstating this provision will greatly go along way to boost the automotive product export.
On the other hand, article 8 allowed for the government to chip in and give financial support to the ailing companies that are footholds of the economy and social functions. The article also rendered immune regional development and other local subsidies adaptation from any negative interference from the WTO (Crane, 2009, p. 20-21). The economic downturn in Canada and the United States is worsening the situation, not to mention the increasing gas prices which are making potential customers opt to sit on their wallets instead of going for the purchases. To ensure that the set Automotive Strategy is synchronized with the requirements of WTO and NAFTA the government has embarked on a renewed negotiation with the two bodies to help the industry match the world market.
Competition is only fair if all the countries are operating on a level playing ground in terms of terms of infrastructure, financial systems, educational systems, public procurement strategies as well as research and development capabilities; if the policies are not able to provide these, then it is very hard to measure up to the challenges that emerge in the global market. The Canadian government should borrow a leaf from their neighbors and long time friends, the United States on how they have strategized on the funds available to the technological advances, computer software, computer chips and other high speed communication systems.
This is a strategy that has seen the U. S amass great investments competitiveness and can never go wrong with Canada (Jackson et al, 1997, p. 280-283). Regulatory policies will help the ailing Canadian automotive industry just the same way it has previously worked with other companies like; Sync rude oil company which was aided by the equity investment of the government, CAE which was developed out of a military offset program into a world leading producer of flight simulators; and to be more particular, the Magna International which grew only as a result of the Canada-U. S Auto Pact Agreement and federal programs. Therefore it shows that if only the policies are got right, then The Canadian Automotive Industry will definitely live to be very beneficial to the nation.
The policies that have been put in place in Canada has boosted the nation’s trade a great deal… these positive aspects are now posing a thereat to the United States and other international manufacturing industries due to Canada’s increased competitiveness in the global market. The subsidies have worked well for the companies and the latest direction taken by the government will see all the collapsed and the ailing companies revived into full operation (Bretton, 1996, p. 69-73). Conclusion If only the implementation of these policies can continue to be got right, then Canada would be making a great hub of investment that would act as a catalyst to propel the country to economic development far above their neighbors.
The following are what the policies are supposed to achieve if implemented right; first, the government is supposed to respect the view of the aforementioned stakeholders in for any formulation of policies touching on the automotive sector; the Strategy Framework that the government had initiated should be carried into completion and its objectives realized, on top of this the policies need to be widened to encompass the following; Research and development, commercial technology, fiscal policy, innovative policy, infrastructure and free flow of goods.
This essay can finally draw a conclusion that federal programs are put in their right context in terms of time and scope like in Canada, then it is possible to steer a country into great economic heights. As Canada moves to counter challenges of the 21st Century, the policies that the players are putting in place need to be very strategic and pragmatic, and not dogmatic as some of them had been earlier witnessed. A complete overhaul is required in the ideological context both from the Canadian political leaders and judiciary with this it believed that the Canadian automotive manufacturers will succeed.