Taxes and tariffs may be looked upon negatively, but with an increasingly globalized world, it will make more sense for Ford to build their new factory in Mexico than in Windsor, Ontario. The North American Free Trade Agreement (NAFTA) allows free trade across the borders of Canada, the US, and Mexico, and in this case, will cost Ontario approximately 2,000 jobs. This story has been told countless times in various industries as production has shifted to Mexico.
There were allegations that Ford didn’t even seriously consider the factory in Windsor and had already set out on the Mexico factory to invest $2 billion in building a new 1.5L engine. The company was seeking $700 million of government financial support, which was too high of a number for a potentially risky investment. Especially considering that Canada has a stable unemployment rate currently, the government seemed less likely to see the benefits.
In terms of risk and reward, Ontario’s government saw positive returns but they also took into account the risk coming from the automobile maker that has had vehicle recalls and other scandals recently. It is shocking that the business ethics here are not being questioned considering that Ford’s employees at the current plant in Windsor have won countless awards for the quality attaches to the product that they have produced in Canada for years.
As yet another factory is won by cheaper labour, these ethics should be questioned and the government should reconsider their involvement in this deal.