Industrie 2030 Action Plan: Manufacturing Growth, Innovation and Prosperity for Canada
Published on: October 19, 2016
Manufacturing is the heart of Canada’s economy. Every individual and every business in Canada is directly supported by manufactured goods. A full 28 per cent of all economic activity across the country is tied to manufacturing. So too is 27 per cent of total employment.
Canadian manufacturers are creating new technologies, services and products in a wide range of critical segments including transportation, communication, health care, clean tech, natural resources, food, and electronics. They are selling those products in Canada and around the world. Last year, Canadian manufacturers exported nearly $350 billion in value-added goods – accounting for a full two-thirds of Canada’s total international sales.
In spite of its critical importance to our economic well-being, Canada’s manufacturing sector is at risk of being taken for granted. Canadians do not realize the full value of manufacturing and the products, technologies and services that it creates for customers around the world. Government policies focus on innovation, exports, or economic development and diversification, but often ignore manufacturing, thinking it to be from a bygone era, with no role to play in advancing those priorities. In fact, manufacturers drive research and development in Canada. They turn ideas into innovative new products capable of solving our most daunting economic and social challenges. They are often the first users of new technologies. In short, manufacturers are both the driver of, and the market for, a Canadian innovation agenda.
Canada’s manufacturing sector is being overlooked at the very time that the world of manufacturing is transforming – a transformation that brings with it tremendous opportunities as well as risks. New technologies are changing both customer demands and manufacturing processes. Advances in new technologies are creating new products and solutions that are allowing manufacturers to help tackle the world’s great problems. Labour-intensive manufacturing countries like China are rapidly moving up the value-added chain, while advanced manufacturing countries like Germany are pressing farther ahead, employing even more advanced technologies and production methods to stay ahead of the curve. And Canada has no plan to react.
At the same time, the cost of doing business in Canada is rising. Manufacturers are moving to more competitive jurisdictions and foreign investment is passing Canada by. These trends are threatening not only the long-term sustainability of manufacturing, but the millions of middleclass Canadians whose livelihoods are directly and indirectly tied to the sector. Policies that focus on middle-class growth and innovation need to recognize that is it manufacturing that drives innovation and creates middle-class jobs. Without that underlying economic driver, Canadians and their governments cannot achieve their desired policy outcomes.
The need for more supportive policies for manufacturers and exporters is evident in many of the key indicators that determine global success in the sector. Manufacturing productivity rates are falling behind those of our global competitors. Investment in new capital equipment and technologies is declining. The business climate is deteriorating as the regulatory and tax burden increases. Companies are investing less in innovation, resulting in the creation of fewer new products. Canada is importing more value-added goods than it is exporting, dramatically reducing sales and growth opportunities. Canada is falling behind – at risk of becoming too high cost and not technically advanced or innovative enough to compete in the global market.
Canada has two choices for how to respond. We can either continue to watch our manufacturing capacity and competitiveness erode, or we can embrace a national strategy that reinvigorates our manufacturing sector by leveraging advanced technologies and decisively addressing our longstanding domestic challenges.
We choose the latter. This is why the Industrie 2030 initiative is so important. Canadian Manufacturers & Exporters’ (CME’s) goal, which we share with our many partner organizations, was to shine a bright light on the manufacturing sector in Canada: to better understand where we stand today; to identify its challenges; and to chart a plan for growth.
The report that follows outlines this plan for growth. This plan and its recommendations stem directly from the input of over 1250 Canadian manufacturers and exporters of all sizes from all corners of the country. While there is some regional and sectoral variation, the core priorities and recommendations are consistent. To tackle Canada’s challenge and double manufacturing output and value-added exports by 2030, Industrie 2030 participants recommended that public and private sector stakeholders focus their efforts on:
- Strengthening the existing and future skilled workforce, including at the management level
- Increasing rates of adoption of advanced manufacturing technologies
- Encouraging more new product development and commercialization
- Improving the business climate for investment
- Expanding access to domestic and foreign markets
The Industrie 2030 consultations, the research, this paper, and the supporting detailed reports are only the start of this process. CME and our partners will now set out to affect change, to reshape and to grow manufacturing in Canada. We will work aggressively to reach our end goal of doubling manufacturing output and value-added exports by 2030. We have developed key performance indicators to monitor our progress.
We invite all manufacturers, Canadians and governments to get involved, to manufacture growth, innovation and prosperity For Canada.