CME INSIGHTS: 2020 TO REMAIN LACKLUSTER; GOVERNMENTS NEED TO FOCUS ON GROWTH
BY MATHEW WILSON, VICE-PRESIDENT, ONTARIO
As we begin 2020, we look ahead to how economic, trade, and political forces will shape business activities. Last year, uncertainties undermined Canada’s economic performance. That uncertainty largely came from the US with the re-negotiation of NAFTA and, trade actions against several other countries, especially China. Despite those uncertainties, Canada’s economic growth for the year ended around 1.7 per cent. The growth, impressive by global comparisons, is not exactly as it seems. It was significantly bolstered by Canada’s population growth, the fastest in the G7. So, while on the surface our economy is expanding, each of us are becoming poorer as per-capita GDP continues to grow very slowly.
Weakness in the economy remains the natural resource and manufacturing sectors. Together, theses sectors directly account for over 20 per cent of Canada’s combined GDP. They are each others largest customers and, they account for almost all of the country’s exports, which drives Canadian prosperity. Both sectors where flat in 2019, a warning sign. Continuous declines in investment mean there is no room for rapid expansion and that the weakness will continue into 2020 and beyond. This should alarm Canadian decision makers and encourage them to drive prosperity and wealth back in the country.
CME’s mission is to help manufacturers grow. We help shape government policies, programs, and regulations to ensure a competitive business environment. Despite the lackluster economic numbers, CME achieved many great outcomes for our members in 2019 including (but not limited to) accelerated depreciation for machinery and equipment, elimination of highest and best use provisions on property tax assessments, reductions in WSIB and EI rates, simplified duty remission processes for steel and aluminium tariffs, and the signing of the new CUSMA agreement to eliminate harmful tariffs on Canada/US trade. Our lobbing directly impacted dozens of labour, environmental, and land-use regulations that add unnecessary costs of doing business in Ontario.
2020 will not be an easy year.We are predicting total growth to be roughly 1.8 per cent. In manufacturing and exporting, that growth will likely be flat again, as global markets remain relatively weak, domestic demand will remain soft, and investment in new productive capacity will continue to lag. From a political standpoint, the US presidential election will cause their political actors to focus on driving domestic investment and growth at the expense of trade partners like Canada. Here at home, the federal government will likely focused more on social issues than economic issues. And, the provincial government will begin to focus its attention on re-election which typically means a greater focus on social policies.
With the support of our members, CME will continue to fight hard to gain traction on your issues with government and ensure your voice is heard. Our focus will be on three priorities for growth. First, reducing the cost of doing business with a specific focus on reducing electricity costs, eliminating unnecessary red-tape and regulations, and reducing industrial property taxes. Second, we will continue to push governments to address the skills gap facing our sector by supporting workplace training and increasing access to foreign talent. And third, securing effective support programs for investment in productive technologies and product commercialization and to help reduce GHG emissions.
CME cannot affect change without your support. And given the political climate, that support is even more important than ever. If you want to find out more about these issues, get more involved in our efforts, or are facing any other issue that is affecting your operations, please contact me directly or any CME staff. We help manufacturers grow.
EMPLOYMENT ZONES UPDATE: PREVENTING RESIDENTIAL ENCROACHMENT FOR MANUFACTURERS
As areas of high economic output, provincially significant employment zones are strategically located to provide stable, reliable employment across the region. They provide opportunities to improve coordination between land use planning, economic development, and infrastructure investments to support investment and job creation over the longer-term.
A Place to Grow: Growth Plan for the Greater Golden Horseshoe sets out new policies that protect employment areas critical to the local and provincial economy. These policies give municipalities the flexibility to change the use of lands from employment areas to other uses, while making sure key employment areas are protected for the long-term.
To make sure employment areas are protected, we have identified provincially significant employment zones as the first phase towards and planning for the long-term. We have made minor changes (or technical amendments) to make sure they align with municipal official plans.
Our policies only apply to areas within a zone that have been designated as employment areas in a municipality’s official plan. Land uses that are currently permitted will not change because of this policy.
Please review the updated mapping and if you believe that the area around your member company should be considered a provincially significant employment zone, please contact Alex Greco and provide background information and a specific rationale as to why this should be the case.
NEW ONTARIO REGIONAL ECONOMIC DEVELOPMENT FUNDS: 1ST INTAKE CLOSES APRIL 10
The Ontario Minister of Economic Development, Job Creation and Trade announced a new Regional Development Program, which will invest more than $100 million over four years, while taking a new approach to support the manufacturing sector in Eastern and Southwestern Ontario.
CME had aggressively lobbied for the creation of this new program after initially informing the government that our members had expressed concerns about the complexity and delays that were taking place when manufacturers tried to make investments in Ontario.
Under the new program, small and medium manufacturers can apply for funding through the Eastern Ontario Development Fund (EODF) and the Southwestern Ontario Development Fund (SWODF). The highlights are as follows:
- Available funding for small-medium manufacturers so that they can invest in new equipment and training to expand operations in these regions;
- A 60-business day decision guarantee in order to help manufacturers plan investment decisions;
- Complementary services and supports, including advisory services, assistance with compliance and approvals, accessing skills and training supports, and information on tax credits;
- A reduced job creation threshold for small-medium manufacturers from ten to five; and,
- A shift to performance-based loans, while continuing grants for small manufacturers in rural communities to help them grow and expand.
The deadline for the first intake period is Monday, January 20th, 2020. If your company is interested in applying for funding through one of the funds, please do so by clicking the hyperlinks above.
REGISTRATION NOW OPEN: HEALTH SAFETY EXCELLENCE PROGRAMS
At Canadian Manufacturers & Exporters, we are committed to helping your companies achieve well-integrated a healthy and safe working environment as well as reduce your overall business costs.
The Health and Safety Excellence program is a WSIB performance-based rewards program integrating the strengths of the previous WSIB Small Business, Safety Groups and Workwell programs. This new model provides a clear road map for Ontario businesses to improve workplace health and safety, but also to help you as manufacturers save money, earn rebates and lower your premiums. Along with saving money and reducing your premiums, there are many other benefits, including:
- Receiving non-financial recognition for the development and implementation of your health and safety program;
- Improving your health and safety experience;
- Gaining access to networking opportunities and support form CME;
- Receiving exclusive access to CME HSEP member resources; and,
- Building a well-crafted and functional health and safety program.
Whether you are just getting started or want to optimize systems and processes you already have in place, the Excellence program can help you reach your goals. Participants can earn both financial and non-financial rewards and create safer workplaces.
Registration is open now and we encourage all of you to register prior to the CME Health and Safety Symposium that is taking place on March 11th.
For more information, please contact Eac@cme-mec.ca