PDAC Perspectives (February 03, 1992)

Canadians are being requested to think about and talk about — competitiveness. The implication of the new Ottawa initiative is that if we work harder and work smarter for less money, we will all become prosperous.

No matter if we become “lean and mean” and pretend we are “slim and stylish,” the fact is that we are actually “broke and begging.” Canadian Airlines International recently published an excellent summary on how Canadians see themselves from a general competitiveness viewpoint. The magazine, entitled Competitiveness 1992, contains contributions from dozens of sectoral leaders, representing all groups in our society. Every contributor chronicled a business, or union, or department that was “doing very well, thank you.” The only clouds in anyone’s sky would dissipate if labor, or business, or government or the public would listen to reason. The basic fact is that our global market share is declining. For a country whose livelihood depends desperately on exports, the trends are ominous. The 1991 figures have still to be juggled by Statistics Canada. They are certain to show that our fastest growing export is cross-border shoppers. The Ottawa mandarins must be alarmed about our industrial strength. Last week for the first time since the hungry 1930s, employees were asked to cut wages to save jobs. One of 1991’s bestsellers was entitled The Great Depression. As Canadian workers cost almost 50% more than their neighbors in the U.S., the likelihood for industrial growth diminishes.

Competitiveness in the mining industry can only be improved by reducing costs. This requires more and richer orebodies; more efficient mining, milling and smelting; more sensible regulations; less compliance and governmental costs; and improved access to markets.

When we seek to increase our competitiveness, we could well copy our mining neighbors to the south. The American Iron Ore Association members are forced to mine, treat and sell material from some of the lowest-grade rock in the world, in competition with low-wage countries with high grades. In a recent article, Thomas Moore, chief executive officer of Cleveland Cliffs Inc., listed five competitiveness objectives adopted in 1990 by the association. With apologies to Mr. Moore, these objectives can be amended to serve as targets for the Canadian mining industry:

— A new wave of technology development and application.

— Excellence in mine planning, with emphasis on improved grade control, millhead consistency and minimum costs.

— Massive reduction of waste throughout the system: ore losses, excess dilution, equipment downtime, injury, absenteeism, transport delays and inefficient allocation of employees.

— True partnerships with suppliers and customers who practise and demand continuous improvements in quality and service.

— Improvement and use of the talents of all employees. No organization can have a surfeit of skill, or expertise, or creativity, or serious work or administrative ability.

If we adopt the competitiveness stance, the first steps for Canadians may prove the steepest:

— We must give up our cherished right to waste time criticizing governments. — Politicians must start earning the excellent salaries they pay themselves. Since their take-home pay lacks a merit component, they should be rewarded by direct, voluntary contributions by their constituents.

— Taxation must be related to services provided by governments rather than money spent by governments. The competitiveness participation exercise will flounder if Canada’s largest employer decides not to participate. — Special interest groups must learn to compromise, and work toward common objectives. Although there is a danger that some may lose their reason for existence, such loss will mark accomplishments. For instance, management and labor have a common destination, and only differ on the road to get there. — All of the economic components in our society must resist guarding their own turfs. Grass rarely grows if it is hidden.