TORONTO - Canada must press Washington to help the sinking auto industry while extracting promises from the sector that it will become sustainable and competitive, federal Liberal leadership hopeful Bob Rae said Friday.
In a speech to a Bay Street luncheon crowd, Rae said it's critical to the country's well-being to get vital parts of the economy growing again.
"The federal government has to get to Detroit and Washington to discuss major assistance packages that are essential to this completely integrated industry," Rae said.
"Canada must be part of any solution or we risk losing much more than we already have."
He rejected the notion that help for the auto industry amounts to throwing good money after bad.
In practical terms, he said, helping ailing factories and companies get back on their feet -- provided conditions are attached to the aid -- would save jobs, communities and families.
He cited previous government help for the de Havilland plant in Toronto and the Algoma steel mill in Sault Ste Marie, Ont.
"The ideologues called them bailouts, but in fact the costs of those restructurings have been recovered, many times over, in tax revenues alone," Rae said.
In laying out his wide-ranging economic plan, the former Ontario premier distanced himself from his New Democrat roots by calling for "competitive" corporate taxes.
"I heard loud and clear in the election that this is anathema to the NDP, but the NDP is wrong," Rae said.
"Economies that thrive, in good and bad times, are the ones that include competitive tax rates, and an environment that encourages venture capital as part of the approach to creating prosperity."
Rae also called for a crash program of government and private investment in infrastructure as a way to keep people working in these tough economic times.
Better infrastructure will make the country more competitive in the future, he said.
As someone who governed Canada's largest province during a deep recession in the early 1990s, Rae said he learned bitter lessons that now guide him well.
"I've had experience in governing when the economy goes into free fall, the worst recession to hit the province of Ontario since the Great Depression," he said.
He attacked Prime Minister Stephen Harper's Conservative government for allowing Ottawa's surpluses to dwindle.
The money, he said, could have been used to help businesses and families weather the economic storm.
Harper has governed "in the name of theories" for too long and "the cupboard is bare as a result," Rae said.
The Liberals are choosing a leader to replace Stephane Dion, who led the party to a dismal defeat in the Oct. 14 federal election.
Rae told the crowd the federal government should change pension rules so seniors aren't forced to liquidate their assets in a down market.
He also called for more assistance for students struggling with high tuition fees and changes to employment insurance rules.
