To: The Hon. Tony Clement, M.P. Muskoka-Parry Sound

 I am writing regarding two recent events that are of considerable importance to the citizens of Muskoka-Parry Sound riding.

 Recently, Lofthouse Brass of Burk’s Falls (a wholly owned Canadian company) was purchased by a multi-national corporation. Also, your government appointed the Competition Policy Review Panel whose recent Compete to Win report advocates the easing of restrictions on foreign ownership.

 In all of this there is a glaring omission; namely how does this affect the many small communities in your riding that have limited opportunities for manufacturing employment?

 Sometimes foreign ownership increases local employment and sometimes it doesn’t. To small communities, the risks are immense.

What’s missing is the social factor. When a community has only a few manufacturers, any loss of jobs results in higher taxes due to the fact that more are placed on Unemployment Insurance (UI) or social assistance, as well as a loss to the tax base of the municipality, which results in increased property taxes.

Furthermore, the commercial tax burden is shifted to existing domestic industries who often employ more people and whose profits are much more closely tied to the community, often being reinvested directly. The increase in taxes often puts domestic industries in a position where they cannot expand or, worse still, are forced out of business altogether.

 The way to remedy this is simple. In transactions involving foreign ownership, a social contract or Good Faith Bond is required, whereby the cost of UI for those laid off should be guaranteed for a specific period of time (be that three years, five years etc.).

Secondly, the municipality should be compensated from this same fund to reduce the shock to the tax base.

Finally, part of this fund should go to local domestic industries for reinvestment to encourage expansion and increase employment to help alleviate losses.

 As it stands today, there is no penalty nor cost for a multi-national company to purchase a Canadian one, shut it down, move the jobs elsewhere and eliminate its competition, which is often the whole point of the purchase. If a multi-national wants to be a part of the Canadian marketplace, it must be required to make not just a commercial investment but also a social one…if they can afford to make the purchase, they can afford to take responsibility for its effects on the community. Otherwise, they alone benefit and leave small communities such as ours in ruins, with nothing but increased taxes to show for it.

And you’re not in favour of increased taxes, are you, Mr. Clement?

 By adding this social component to the costs of the purchase, you not only protect employment in small communities but also ensure that multinational companies are much more serious about investment and not just the elimination of domestic market competition.

This is not protectionism, it is social responsibility.

 Christopher Hope,
 Burk’s Falls