Manufacturing Canada’s Future

Manufacturing is a cornerstone of Canada’s economy

The manufacturing sector is a cornerstone of Canada’s economy, playing a crucial role in creating jobs, fostering innovation, and driving economic growth. The nation’s 90,000 manufacturers directly generate 9.5 per cent of Canada’s real gross domestic product (GDP), make up one-quarter of its business research and development spending, and account for 60 per cent of the country’s outbound goods. Taken together, the sector’s direct, indirect and induced impacts amount to 27 per cent of Canada’s total economic activity.

In addition, by employing 1.79 million Canadians and supporting 3.58 million more jobs through supply chain activity and employee spending, the manufacturing industry undoubtedly makes substantial contributions to communities across Canada.

New challenges require new policy recommendations

CME embarked upon cross-country consultations with its member companies during the spring and summer of 2023, leveraging their expertise and industry experience.

Throughout the consultation process, consistent and familiar themes emerged that reaffirmed the well-documented problems facing the manufacturing industry in Canada, such as labour and skills shortages, red tape and regulatory barriers, and the lack of incentives to invest in productivity-enhancing machinery and equipment. It also revealed new challenges that the sector is facing today, including housing shortages, the role of municipalities as a major obstacle to growth, and growing pressures to rapidly decarbonize the industry.

Put together, these challenges require new policy recommendations for governments to act upon if the Canadian manufacturing sector is to remain competitive over the long run.

By addressing these challenges, manufacturers will be able to seize the opportunities presented by current economic, geopolitical, and environmental trends. Accordingly, now more than ever, all levels of government need to work together with industry to develop and implement a comprehensive national strategy for advanced manufacturing. The strategy includes 22 recommendations organized under the following four pillars:

1. Expanding and upskilling Canada’s manufacturing workforce.
2. Stimulating innovation, investment, and the adoption of advanced manufacturing technologies.
3. Encouraging domestic manufacturing production and value-added exports.
4. Speeding up and expanding clean technology incentives to help manufacturers adapt to and advance Canada’s climate change plan.