The question now is this: will he play offence or defence?
For the first time since high fuel prices and a weak U. S. economy began their steady assault on this country's auto manufacturing sector, Flaherty sounded like he cares, a little bit. Faced with General Motors of Canada's surprise announcement that it will shutter its Oshawa pickup plant, he proposed that GM might take a share of a $250-million federal fund set up to boost development of fuel-efficient vehicles.
If the automaker can cobble together a plan to produce a gas-electric hybrid in Oshawa, in other words, the feds may give it a big chunk of cash. Add to that the threat from Ontario to take back $175 million in loans made to GM three years ago, and there's powerful incentive for GM to rethink its plans.
Here's the trouble: it's a finger in the dyke. Short term, it is laudable and necessary for government to do what it can to protect Canadian manufacturing jobs. Long term, it seems to me, we need a national strategy that gets us beyond our reliance on building big cars and trucks that run on gasoline or diesel.
China and the India soon will be mass-producing conventional gasoline-powered cars at costs a fraction of those in Canada. Toyota, Renault, Hyundai and Tata all are working furiously to develop under-$5,000 compact cars for sale in emerging markets. Market forces dictate that at some stage those ultra-low-cost cars will make their way to North America. Arguably, they should: isn't disinflation in the price of consumer products the single greatest benefit to us of free trade?
But there are big problems here. If $25,000 cars in sparsely populated industrialized nations are mucking up the air and spewing too much carbon dioxide into the atmosphere, imagine what a $5,000 car in China will do.
Second, and of much more immediate importance to anyone who lives in Oshawa or Windsor, our auto industry as we know it will vanish. A GM worker earning $35 an hour cannot compete, productivity-wise, with a Chinese worker earning $5 a day.
In Ontario, this is the elephant in the room. It underlies the backbiting we saw earlier this year between the federal finance minister and Premier Dalton McGuinty. Each sees the approaching cataclysm. They know they can't stop it. And they're desperately looking for a way to transfer blame, before it happens.
There is no such thing as a magic bullet to insulate Ontario's manufacturing economy from the seismic shifts to come. But maybe we're missing part of the picture. Soaring gasoline prices very likely are here to stay. That will make driving conventional cars - even ultra-cheap ones produced in China - far less affordable than we've ever been used to, no matter how compact they are.
So, perhaps it's time Canadians set about building and mass-producing an all-electric car, with no carbon-fuel component at all, to replace vehicles driven by internal combustion. Such a car would necessarily be tiny and lightweight. It would travel at speeds below those of conventional automobiles. It would be ill-suited to long highway trips. But it would be well positioned to help us lower our costs in the North America to come, which likely will be subject to some form of tax on carbon.
A mass-market electric car for Canada would have broader implications. The first would be a need for fast, modern rail service, with rail cars specially designed to transport these new personal vehicles over longer distances. The second would be a huge need for new sources of power. That would require much more active government investment in wind, micro-hydro, geothermal and solar power. Solar roofing tiles - known as Building Integrated Photovoltaic (BIPV) panels - are already in the marketplace. With a big push from government, these could go mass market.
Most of all, the country would need more, newer and better nuclear power plants. That notion is anathema to the Green party and to many environmentalists. But there would be no avoiding it, given our existing uses for electricity, combined with greatly increased consumption stemming from mass use of electric vehicles.
Is this all just dreaming? Possibly. But that's partly what we pay politicians to do isn't it? They need to look forward. If Flaherty, McGuinty et al spent more time thinking and less time gnashing their teeth and pointing fingers, we'd all be better off.
And come election time, so would they.