Ottawa, October 31, 2022 – As the federal government plans to release its Fall Economic Statement Thursday, Canadian Manufacturers & Exporters (CME) is urging Deputy Prime Minister Chrystia Freeland to address persistent challenges facing Canada’s manufacturers, namely: labour shortages and investment incentive gaps caused by the US’ Inflation Reduction Act.

The Deputy Prime Minister has stated that Canada’s economy is facing troubling days ahead. That is why the government has said it is focused on strengthening Canada’s efforts around transitioning to clean electricity, manufacturing electric vehicles and batteries, and developing Canada’s critical minerals sector. Manufacturers fully support these strategic moves and are perfectly positioned to help Canada’s economy weather the economic storm.

That is because the manufacturing sector accounts for nearly 10% of Canada’s gross domestic product, 2/3 of our goods exports, directly employs 1.7 million people across the country, and had sales hit a record high of $718.4 billion in 2021.

However, persistent challenges hold back this growth. According to new survey results released by CME last week, in the last year alone, labour shortages have resulted in economic losses totalling nearly $13 billion. During this same time, 62 per cent of manufacturers have lost or turned down contracts and faced production delays due to a lack of workers, resulting in $7.2 billion in lost sales and penalties for late delivery. The incentives offered in the US’ Inflation Reduction Act are very concerning on the investment front. The US plan directly incentivises battery and electric vehicle production, in addition to giving consumers generous tax breaks on their purchases of electric vehicles. The once equal playing field between Canada and the US has now been wiped away, and Canada must play catch up or risk losing future investment in these critical manufacturing sectors.

For these two reasons alone, Canadian manufacturers will need specific measures in the Fall Economic Statement to support them.

“To reduce labour shortages, the government should pursue more ambitious immigration targets, reduce application processing backlogs, and provide money for employer led training” said Dennis Darby, President and CEO of CME.

The association states that the government must close the gaps between US government manufacturing investment incentives and Canada’s caused by the US’ Inflation Reduction Act (IRA). CME is also asking the government to narrow the incentive gaps caused by the IRA by enhancing our similar programs, expanding the Net Zero Accelerator Fund, and renewing and expanding the reach of the Accelerated Investment Incentive.

“Canadian businesses, and manufacturers in particular, cannot afford to wait years for government to address these two major competitiveness problems. Other countries are pouring billions into their industrial sectors and are finding and training the workers needed to fill the jobs of the future. If Canada does not follow suit, we will lose out on manufacturing investment and the good jobs that come with it” concluded Darby.

CME had detailed these and other needed measures in its 2023 pre-budget submission.

Quick Facts

  • The manufacturing sector accounts for nearly 10% of Canada’s real gross domestic product.
  • Manufacturers employ 1.7 million people in Canada.
  • Total manufacturing sales hit a record high of $718.4 billion in 2021.

For more information

Jane Taber
Vice President, Public Affairs
NATIONAL Public Relations
C: 902-209-9512 | jtaber@national.ca