Ontario needs more than auto investment, economist says

Despite more than 1,000 jobs coming to Fiat Chrysler Automobiles' assembly plant in Windsor, Ont., the southwest still needs to do more to diversify its economy, according to an economist at Western University.

At the Canadian International Auto show in Toronto, Fiat Chrysler Canada president and CEO Reid Bigland announced 1,200 additional positions were needed at the Windsor Assembly Plant to replace outgoing workers and to build the new Chrysler Pacifica minivan.

That number is double what was initially expected.

• Windsor Assembly Plant to hire 1,200 new workers FCA CEO says
• Windsor gets first glimpse at new Chrysler Pacifica
• No plans for Chrysler crossover SUV at Windsor Assembly Plant, CEO says

"Because of lower oil prices and a lower Canadian dollar, it's made this region far more competitive," said Mike Moffatt, an assistant professor at the Ivey Business School. "But that big picture aside, we still have the highest unemployment rate in Canada in Windsor. There are still issues around the fact that Windsor, particularly, and a lot of southwest Ontario are heavily invested in automotive manufacturing.

"We need to think of what we can do for automotive, but as well, how we can strengthen some of our other sectors," he said.

When the new Fiat Chrysler jobs were announced in Toronto, a figure floated around was that each automotive job was responsible for nine other spinoff jobs.

Moffatt said he's not certain that number is accurate.

"There certainly is a multiplier, no question, now that 'nine' needs to be taken with a little grain of salt," Moffatt said."It's really hard to measure how many extra people the coffee shop needs to hire because a plant has 1,200 more people. That's more difficult."

'You don't want to forget about the auto sector'

Dino Chiodo, the president of Unifor Local 444 said he agrees with the diversification argument -- but only to a certain extent.

Unifor represents about 4,500 unionized employees at the Windsor Assembly Plant.

"You don't want to forget about the auto sector in its entirety," Chiodo said. "This is true, jobs support the people of our community and we've got to continue moving forward because it's definitely worth fighting for."

While communities like Windsor shouldn't discourage automotive investment, Moffatt said it may be better to encourage international postgraduate students to stay in Canada and to strengthen other sectors like technology and financial services.

"More diversity is better," Moffatt said. "This isn't just a southwestern Ontario problem. We're seeing this out in Alberta and in Newfoundland, with the over-reliance on the oil and gas sector. This is a very common problem that we see in various communities whether it be a Toronto, a Vancouver or even a Kitchener-Waterloo, [they] tend to weather the storm a little better than one-industry towns."