MANUFACTURING INDUSTRY IN KITCHENER WATERLOO NEEDS FURTHER INVESTMENT IN WORKFORCE DEVELOPMENT

Innovation and technology-driven industry calls for upskilling and expanded training

Ottawa, May 1, 2025 – Kitchener-Waterloo region manufacturers are seeing opportunities for economic resilience in productivity enhancing technologies and manufactured components for the nuclear supply chain. But a disconnect between the needs of manufacturers and the unavailability of key skilled workers is creating challenges, according to a new report by Canadian Manufacturers & Exporters (CME).

CME’s second annual labour report, titled Keep Calm and Keep Training, highlights the impact of the Trump tariffs on Ontario’s manufacturing workforce. According to the report, the province’s workforce was flat in 2024 compared to the previous year, and many companies have frozen hiring and investment: 40 per cent of manufacturers postponed investment projects; 28 per cent froze hiring and 28 per cent started seeking alternative markets.

At the same time, however, the province is facing ongoing challenges in training workers for advanced manufacturing technologies, and Ontario colleges and universities have been forced to cut critical programs.

Over the next two years, colleges alone expect to lose between 75,000 to 128,000 students, largely due to the sharp reduction in international student numbers. This translates to a staggering 25 per cent to 40 per cent drop in total enrollment.  Making this worse, one in four factory workers was 55 or older last year, which means the sector is projected to face 22,500 retirements per year through 2033.

Kitchener-Waterloo is a powerhouse for robotics, AI and other technologies, with manufacturing accounting for 15.1 per cent of overall employment, a four per cent increase in 2024. Cambridge contributes significantly as an automotive hub with award-winning Toyota Assembly plants and BWXT, a key player in metal fabrication for nuclear reactors.

Despite its strengths, Kitchener-Waterloo’s manufacturing sector faces challenges such as lagging technology adoption compared to U.S. counterparts and must re-skill its workforce and bolster training programs to improve economic resilience.

The report outlines recommendations to address the region’s greatest needs to ensure it can keep up with increasing demand for labour in an innovation-driven world, including expanding apprenticeship training, re-skilling aging workers in new technologies, and addressing immigration barriers to facilitate long-term employment pathways for skilled immigrant workers.

Amid the challenges faced the sector, CME sees cause for hope in the resolve manufacturers and government have expressed to fight back.

“Crises come and go, but our sector endures,” said Dennis Darby, CME President and CEO. “Our manufacturing sector has gone through world wars, economic crashes, and even a global pandemic. But here we are now, more modern, more innovative and more ready to face global headwinds than ever before.”

The report also highlights several areas of regional economic strength, and many ideas for resilience:

1. Support workforce development in businesses – by improving incentives for employers to offer on-the-job training opportunities, addressing obstacles causing apprentices and students to abandon the sector.
2. Properly resource education programs aligned with the needs of manufacturers.
3. Use Ontario’s diversity as a competitive advantage – attracting more under-represented women, indigenous people and immigrants with in-demand skills.

Ontario manufacturing sector is at a crucial crossroads. Manufacturers, however, have a plan. This starts now in our schools in workplaces, as we teach hands-on, applied technological skills to build quality products and prosperity.

Keep calm, carry on, and most importantly, keep training.