ISSUE

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’S POSITION

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.

OVERVIEW

After initial review of the CUSMA, it is apparent that the Canadian government consulted with CME’s and our members.

The government tightly negotiated for, perhaps at the expense of another sector, and implemented many of  CME’s core recommendations to strengthen and improve the trading relationship for manufacturers across North America.

From the start, the NAFTA renegotiation was never an exercise in modernizing the agreement – it was a fight to maintain Canada’s access to the world’s biggest market. Given this context, maintaining status quo is, in fact, a win.

CME’s top priority was that no harm should be done to the integrated manufacturing sector.

In almost all areas where CME made recommendations, the USMCA maintains or improves on previous NAFTA commitments.

10 OF 11 CME RECOMMENDATION ADOPTED

• Ensure NAFTA renegotiation results in maintaining at least the same degree of access into and from the Mexican and US markets that Canadian manufacturers currently enjoy.
• Update, modernize and coordinate customs procedures to reflect current business realities; and better leverage technology to reduce administrative burdens, increase security and speed border crossing times.
• Strengthen regulatory cooperation to allow products to be designed, tested and produced once and sold across the region without additional regulatory approvals.
• Expand NAFTA’s Trade in Services chapter by using the framework TPP agreement to broaden and deepen Canada’s commitments to eliminate existing and potentially future exclusions.
• Using the TPP agreement’s Digital Trade chapter as a model, create a new chapter within NAFTA to support growth in the digital economy and manufacturing.
• Work with the US and Mexico to develop a common North American approach to addressing unfair trading practices from outside the region – an approach that specifically addresses industry concerns about currency manipulation, illegal substitution and dumping.
• Work with the US and Mexico to develop a common approach to eliminating non-tariff barriers in non-NAFTA countries. In addition, develop a unified approach to raising regulatory, environmental and labour standards outside NAFTA to North American standards.

CME RECOMMENDATIONS PARTIALLY INCLUDED IN USMCA

In many areas championed by CME, the US was looking to take significant steps backwards, which Canada ultimately did not agree to.

So, while CME’s  initial recommendation may have not been met,  CME’s overall objective to do no harm and strengthen integrated manufacturing base within a global context is reached. These areas include most notably government procurement and dispute settlement.

ISSUE

The Government of Canada has shifted its trade policy to focus more on export diversification.

This has resulted in the rebranding of the Minister of International Trade into the Minister of International Trade Diversification and the adoption of a formal trade diversification strategy.

IMPACT ON MANUFACTURERS

Canadian manufacturers are part of regional as well as global supply chains. Trade diversification is positive for businesses if it:

• generates new production mandates;
• opens new markets access gains; and
• results in incremental export growth.

A diversification strategy offers little benefit if it comes at the expense of integrated North American supply chains, or merely substitutes one export destination for another.

CME'S POSITION

CME supports free trade and trade diversification. We are working to ensure that new free trade agreements meet the following three standards:

• They create a fair and level playing field for Canadian manufacturers and exporters and result in reciprocal access to foreign markets;
• They expand Canadian exports of value-added goods and not just natural resources; and
• They do not undermine the existing integrated manufacturing supply chains developed through previous FTAs, especially the NAFTA/USMCA.

We are also working with governments to ensure that SMEs can benefit from these agreements by: improving access to market intelligence; creating better export-readiness programs; and simplifying government supports.

LEARN MORE

• Minister of International Trade Mandate Letter