Manufacturing is critical to Canada’s economy. Manufacturers are responsible for the production of essential goods we use everyday, and they also shape the economic and social fabric of the communities in which they operate. The sector represents more than 91,000 companies, employs over 1.7 million Canadians, generates $690 billion in sales, and accounts for 10.2% of the country’s total GDP. But the sector is falling behind – dropping investment, output, and jobs. This is why we need to act now for manufacturing.
Our sector was deeply wounded by COVID-19. But this is not the only reason why we are having trouble bouncing back. In recent years, Canadian manufacturing output and exports have grown at a much slower pace than in other developed countries. This is largely due to a steady decline in manufacturing investment that began in the early 2000s and the lack of a comprehensive industrial strategy at the federal level. Many manufacturers also report that due to a number of factors, including red tape, the cost of doing business in Canada has increased dramatically.
This erosion of our industrial competitiveness has had a direct impact on the ability of our manufacturing companies to respond to the crisis – or potential crisis – and to recover from it. In March 2020, overnight, factories across Canada reinvented themselves to produce respirators, masks, surgical gowns, and more. From making goods essential to Canada’s response, to stabilizing the economy by keeping millions of Canadians employed, manufacturing played a major role in supporting Canada over the past year and half. As we now emerge from the pandemic and we look to chart our path forward for decades to come, we must ask ourselves what type of country and economy we want to build.
This pandemic clearly demonstrated the importance of investing in our manufacturing capabilities now. CME’s goal in the upcoming federal election is to have all parties adopt a pro-jobs and pro-growth manufacturing strategy as part of their election platforms that will drive a manufacturing renaissance in Canada.
Reigniting Canada’s manufacturing sector—a critical engine of the economy—is essential if Canada is to build a more competitive, greener, innovative, inclusive, and resilient economy. If there is over $2.5 trillion invested in the manufacturing sector annually in the OECD, then Canada must capture more of this share of global investment dollars. Canada’s goal should be to attract at least 2% of the annual manufacturing investment into the OECD, or $50 billion annually in Canada’s manufacturing sector over the next decade.
As all business leaders know, we cannot meet our goals without a plan and without concrete objectives and targets. That plan must focus on overcoming barriers to investment and working in partnership with government to drive change. As such, CME is calling on all federal parties to commit to a 2% challenge, work with manufacturers to implement an effective and comprehensive industrial strategy for Canada that focuses on the following key priorities:
- Get the workers we need;
- Stimulate investment in innovation and advanced technologies;
- Increase Canadian exports; and
- Adopt a net-zero strategy.
With potential for reshoring manufacturing amid ongoing global shifts in supply chains and with increased pressure for environmental performance and social progress, Canadian manufacturing is ready for its next challenge and ready to lead again. However, we need a partner in the federal government.