CME is focused on helping companies scale up their operations in Canada and abroad by removing barriers to growth, and by lowering the cost and risk of investing in new machinery, equipment and technologies.
Strategic investments in innovation and technology adoption is the starting point of a virtuous cycle that ultimately leads to more output, employment and economic growth across Canada.
Innovation and investment in new technology improves productivity. That, in turn, helps businesses become more competitive; attracting more production mandates and, capturing greater market share.
This leads to increased profitability and, more money to invest in innovation and new technology.
Canada ranks poorly in both technology adoption and innovation in manufacturing compared to other advanced economies.
Underinvestment in machinery and equipment is a major factor behind Canada lagging productivity growth.
Why It Matters
Businesses that invest in digital technologies have a considerably better growth outlook than their non-adopting counterparts. This results in a wide range of potential benefits:
- Lower operating costs. Digitization opens the door to the collection of data that can be mined to identify efficiencies in existing operations, decrease downtime, and monitor and guide production activity.
- Increased product quality. Advanced technologies can help to root out errors and deficiencies in production, boost quality control, and lead to overall improvements in the production process.
- Higher innovation capacity. Technologies like 3D printing and electronic prototyping lower innovation costs and can unlock new abilities and capacity that were previously unavailable to producers.
- Increased customer satisfaction. Digitization and advanced technology use can increase customer satisfaction by decreasing response times, creating more specialization and customization opportunities, and improving product quality.
Challenges & Solutions
HIGH PURCHASE COSTS & UNCERTAIN ROI
New equipment and technologies are expensive and, the way they fit into existing operations is not always obvious.
- Introduce a shared 20 per cent investment tax credit on the purchase of new machinery, equipment and technologies, including software.
- Support the creation and delivery of a nation-wide government-led SMART program that offsets the cost of technology assessment, diagnostic services; and provide support for SMEs.
- Develop an awareness campaign that demonstrates the benefits of technology adoption
LACK OF INFORMATION & TESTING OPPORTUNITIES
Businesses are not always aware of what technologies are available, what their benefits and capabilities are, and how they would fit into (or disrupt) existing operations.
- Provide financial support to facilitate technology demonstration tours and site visits that showcase cutting-edge machinery, equipment and technologies.
- Fund a series of technology demonstration and testing hubs across Canada that give manufacturers the opportunity to learn about and test new technologies.
- Develop an online technology adoption roadmap.
LABOUR & SKILL SHORTAGES
When businesses cannot find workers with the specialized skills needed to assess, operate and maintain that equipment, it limits their ability to adopt technology.
- Encourage more youth to choose a manufacturing career.
- bring together major employers, their supply chains, and local secondary and post-secondary institutions to discuss workforce needs, and drive curriculum planning
- Extend and make permanent the Atlantic Immigration Pilot to the rest of Canada.
- Developing closer business/post-secondary ties for curriculum development and work-integrated learning programs.
- Improve tax incentives for technology investment;
- Reform the tax system to incentivize business growth;
- Reduce project approval timelines and increase investment certainty;
- Improve access to technology-related training and skills updating; and
- Modernize and enhance the federal SR&ED program.
CME REPORTS AND PUBLICATIONS
UNLOCKING ATLANTIC CANADA’S GROWTH POTENTIAL IN MANUFACTURING
This CME report identified four broad, but interconnected themes that contribute to Atlantic Canada’s lagging record on innovation and technology adoption in manufacturing. The report offers 15 key findings, based on Atlantic Canadian manufacturers' input, for government policy action that could help remove some of the barriers.
Encouraging business investment in new machinery, equipment and technologies is key to unlocking productivity gains, improving global competitiveness and reducing manufacturers’ environmental footprint. CME believes that implementing a pan-Canadian SMART program is an important step in achieving this goal.
IMPACT ON MANUFACTURERS
The CME SMART program was a provincial economic development initiative run with support from FedDevOntario. It provided direct funding to over 1,400 manufacturing projects in Ontario and assisted manufacturers in the following ways:
- Improving their day-to-day operations;
- Making process improvements, such as the process to install production equipment;
- Reducing their GHG emissions;
- Improving their energy efficiency practices; and,
- Supporting investments in new technology and process and productivity improvements.
CME is advocating for a pan-Canadian version of the former Ontario SMART program. Its goal would be to improve the competitiveness of the manufacturing supply chain, achieve cost savings and enable new investments for Canada’s manufacturing sector.
As the federal and provincial governments unroll their plans to price on carbon emissions, CME believes that the revenues collected from manufacturers should be returned to the sector through incentive programs to invest in new machinery, equipment and technologies. Based on its success in Ontario, a national SMART program would be an important step in that direction.