I think your view is a little overly simplistic. I have some experience with a business that operates in California and it is a VERY expensive jurisdiction to operate that is extremely friendly to labour unions, is unfriendly to business and has relatively high taxes compared to other states. And yet Tesla chose to locate there.
In fact you could do a Search/Replace of Canada with California and your statements would still ring true.
Yes it is a bit simplistic, but it's also true. As always, there are many factors to the problem.
But
Our business was founded in the late 70's, and our main customers were Original Equipment Manufacturers and industrials. We changed our business model in the late 90's as we saw that our industrial base was beginning to shift to a commercial and information based economy (in southern Ontario). The last 15 years has seen most of the small and medium manufacturers disappear to China, Mexico and the Southern USA - to the point where "a low dollar" doesn't matter as much to manufacturing exporters - as there are so few left. Yes we have automotive manufacturers and big Canadian suppliers (Magna, Linamar) as well as a few large OEM to build their machinery (Valiant Machine, Prodomax, ATS)....but that is it. The thousands of small tool builders, machine assemblers etc have left the country, gone broke, or shuttered their Ontario facilities. Most of them for the reasons stated above in my comment. They are not coming back.
I sit on the Board of the Electrofederation of Canada. One of our most interesting committees is a "Canadian manufacturers' group". They constantly talk of the increasing problems with staying in Canada....and yes most of their comments are reflected in mine.
@Phillip L is also correct; Hydro costs are killing them.
Examples: Bill Hammond CEO of Hammond Power Solutions, Guelph Ontario has gone on record several times on his reasons to move manufacturing from Guelph to Mexico as those above. (Note that he still has factories in Guelph, Walkerton, and Granby QC)
Shelley Bacon CEO of Northern Cables, Brockville Ontario has stated in a number of public meetings: The Ontario government's unwillingness to keep hydro rates to "reasonable rates" is the biggest reason for him not to expand in Brockville, He also states that Government red tape and difficulty in doing business is a show stopper as well. Northern Cables will probably locate a factory in the Southern USA.
Yes California has high labour costs, and is more union friendly than some States (not as friendly as Canada). They did locate where they knew their biggest market would be, and more importantly, where the intellectual ability is located.
