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Putting GE Peterborough’s recent layoffs in perspective of a shifting Canadian economy

On Tuesday, January 17th, General Electric’s Peterborough plant announced that it would be laying off 150 of its 520 employees. This unfortunate news comes in the wake of the city’s promising employment stats released last May, which boasted a joblessness rate of just 2.8%.

A statement released from the company reads: “Challenging marketplace dynamics and a current drop in volume of orders from our customers continues to impact GE Peterborough. As a result, we have undertaken permanent workforce reductions of up to 150 employees to address the work shortage. GE is committed to working with the union and affected employees to provide assistance wherever possible”.

Although these layoffs may come as a shock to many, Peterborough has become no stranger to manufacturing plants downscaling since the turn of the millennium. Once the city’s dominant local industry, manufacturers like the Quaker Oats factory have been overtaken by public institutions such as the Peterborough Regional Health Centre, Kawartha Pine Ridge District School Board and Fleming College as the city’s largest employers.

Arthur was unable to receive a comment from Mayor Daryl Bennett regarding the recent layoffs. However, an email statement from the Mayor posted by CHEX News reads: “General Electric is making a difficult business decision due to a downturn in customer orders. I sincerely hope the federal government will deal with the Energy East pipeline application so that we can recover some of these lost jobs in our community.”

Mayor Bennett’s mention of the Energy East Pipeline is a reference to an order from EE in 2014 for 85 new motors to be built by the Peterborough plant. This contract would have led to 250 news jobs within Peterborough, half of which would be directly tied to GE. The contract was supposed to have started in 2016. However, with a delayed approval for the pipeline project from Prime Minister Trudeau’s federal government, the motors have not yet been built.

Trudeau’s delay on approving the project is part of an ongoing narrative that has been espoused by the Prime Minister during his time in office, in which he and his cabinet claim to be trying to strike a balance between maintaining a thriving Canadian economy, while at the same time respecting the rights of Indigenous people and preserving our environment for generations to come.

While the Mayor’s references to the East Energy Pipeline delay are not invalid, GE’s recent layoffs are part of a larger, ongoing trend within Ontario and Canada as whole, in which manufacturing jobs are shrinking in scale and being replaced by an expanding service economy within the province and country.

According to the Mowat Centre, a non-partisan, independent public policy think tank based out of the University of Toronto, manufacturing employment within Ontario has dropped from 15.8% to 10.3%. That is a loss of about 300,000 people working within the province’s manufacturing sector since the early 2000s. The service sector, on the other hand, makes up 76.9% of the province’s economy, employing about 5.3 million workers.

One major criticism of this shift has been that jobs within the service sector often offer lower wages and fewer chances for full-time employment for workers than in the manufacturing industry.

The decline of manufacturing jobs within Canada and Ontario is due to a multitude of factors, including the acceleration of economic globalization, increasing automation within factories, and shifting exchange rates between Canada and the rest of the world.

While technological advancement pushing out members of the workforce is generally viewed as an inevitable cost of a progressing society, trade liberalization policies that favor minimal tariff barriers, licensing rules, and quotas have come under increasing scrutiny by members of the Canadian public regarding the effects they have on the nation’s economy.

A recent poll by the Angus Reid Institute found that only 24% of Canadian’s believe that one of the most significant of these policies, the North American Free Trade Agreement, has been good for the country, with 34% saying it should be renegotiated.

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