According to Paul Krugman, Canada’s free health care is pulling jobs north, particularly in the auto industry. The evidence for this is Toyota’s second plant in Canada, 17 years after its first plant opened 33 miles away. The new plant will build the RAV4. The existing plant builds the Corolla, Matrix, and Lexus RX330, all of which share components with the RAV4. Two years ago, Toyota announced its fourth plant in the US. It has also added a truck plant in Mexico.
Health costs may be one factor in the decision, with education, but Krugman is willfully ignoring the value of locating similar plants near each other, the $100 million in government incentives, and the lower land costs in Canada. But then, demagoguery is so much easier than economics.
