Continued investment in manufacturing key to economic growth

Mississauga.com
Oct. 13, 2015
By Jason Spencer

When Statistics Canada announced a technical recession in the same breath as second quarter results it didn't come as a surprise.

Slow growth or not, the economy has remained one of the most pressing issues of the election campaign with the Conservative party candidates standing by their lines that we're better off financially than many parts of the world.

The recent signing of the Trans-Pacific Partnership trade deal - which the NDP questions the lack of transparency in the negotiations - has thickened the campaign plot with many wondering if the move will in fact better equip Canada to compete internationally.

Manufacturing and exporting is a crucial piece to our economy, and its success or failure has a ripple effect across the country.

Ian Howcroft, vice-president of Canadian Manufacturers and Exporters (CME) Ontario division, says one job in the sector creates two to three jobs in the service sector.

He said manufacturing accounted for $285 billion in Ontario's economy last year and more than half a trillion dollars in the national economy.

And, given their close proximity to Pearson International Airport, Mississauga and Brampton manufacturers have a strategic advantage to compete.

"They have billions of dollars in manufactured output in those areas…a lot of people don't recognize how important manufacturing is to Peel and having the airport there is a large asset and large benefit that you can leverage, particularly for global trade," said Howcroft, whose office for the Ontario arm of the national trade organization is located in Mississauga.

Peel has rebounded to almost where it was before the 2008 recession hit, said Howcroft, but changes across the sector in the past two decades call for a new plan to foster growth.

A lower Canadian dollar helps in the short term, he said, noting that 80 per cent of Ontario's exports go to the U.S., but we can't rely on that.

"We always encourage our members to take advantage of technological investments and productivity improvements because you never know what the value of the dollar will be," he said.

Howcroft said the CME is non-partisan and whoever wins the federal election needs to understand the importance of manufacturing as an "engine that drives the economy," and will continue supporting programs such as Scientific Research and Experimental Development tax incentive. According to the Revenue Canada website, the federal program provides Canadian businesses "more than $3 billion in tax incentives to over 20,000 claimants annually" for doing research and development.

The CME has a funding program of its own for small businesses called Smart. With the backing of both the federal and provincial governments, the initiative assists "companies improve productivity, introduce new equipment and deal with the global marketplace."

According to the CME's Smart program website, funding has been given to more than 1,100 Ontario businesses through FedDev, the Federal Economic Development Agency for Southern Ontario

Calling Smart a "huge success," and noting that it expires in 2017, Howcroft said these partnerships between government and organizations like CME must continue into the future as they provide vital growth that helps buoy our standard of living.

"They've been a real win for the manufacturing community and ultimately for the province and for Peel because it supports the growth, it supports improved productivity and it allows people to have the jobs," he said.

Howcroft said more needs to be done to better recruit new employees into the manufacturing sector. However, part of the challenge, he said, is overcoming the negative image of factory closures and layoffs that seem to pervade the daily headlines.

Casey DiBattista, general manager of ABB Robotics in Brampton, said his company is having trouble bringing in the skilled talent that's needed right now.

That's why ABB has invested in post-secondary institutions such as Sheridan College in Brampton where they have some 15 robots set up in a training centre for students.

He said they also have a co-op program where students are brought in for six months before heading back into the classroom.

"It's a long program. It's not like you go hire a guy off the street who has the technology now – this takes two, three, four years to get people up to speed with the technology," said DiBattista.

Whereas the federal government offers apprenticeship grants to say, someone who is studying to be an electrician or plumber, DiBattista said an apprenticeship in robotics would be "nice,"  but he's not sure if one exists yet.

Automation, DiBattista suggests, is a natural progression for companies looking to survive in the global market – especially in a recession when plants are looking to invest in future efficiency.

And he disagrees with those who may feel that this brave new world takes more employment than it gives.

"It actually creates jobs, at the end of the day," he said, pointing out that the more automation there is at a factory, the more highly skilled workers are needed to program and monitor the equipment.