Monday, September 24, 2018Canada's Leading Online Business Magazine

Manufacturing: Still The Primary Driver Of The Nation’s Economy

By Angus Gillespie

The rapid advancement of artificial intelligence, innovative technologies are reshaping the way humans live and the work they do. Keep in mind, we are still at the very early stages of this transformational period and new inventions are going to sprout up with more dynamic punch than before with so-called traditional manufacturing jobs from the 1960s through the 1990s slowly becoming obsolete. A particularly tough time came between 2004 and 2008, when more than 320,000 high-paying manufacturing jobs were lost, according to figures released by Statistics Canada. But this country was by no means alone in the noticeable decline. From 1998 to 2008, the United States lost 4.1 million manufacturing jobs, or about 22% of its entire total.

The disruption to world economies has never seen anything like this in history. It’s already begun to greatly alter how we learn, work and live. Through it all is the question of how traditional manufacturing jobs will evolve in such a manner that jobs will still be available as the country’s population base continues to expand.

There are 21 industry groups recognized within the manufacturing sector according to Statistics Canada and accounts for nearly $174 billion of the country’s annual GDP, or nearly 11% in total. About $355 billion of the goods produced in Canada is shipped to international destination, representing almost 70% of all of merchandise exports.

From coast to coast there are 1.7 million well-paying manufacturing jobs and in order to keep that number, companies have recognized the need to modernize through innovative solutions, which includes more efficient processes, machinery and workers.

One need only look at the programs now being offered at colleges and universities to see how the shift is on towards a higher degree of informational and innovative emphasis that is being placed on the curriculum. Companies such as Milo Enterprises of Vancouver, FixMeStick of Montreal, MSW Plastics of Palmerston, Ontario and Therapure Biopharma are just four examples of companies of varying sizes that are excelling in this new era, equipped by a high skilled level of human capital and manufacturing efficiencies.

NAFTA and TPP

As the North American Free Trade Agreement (NAFTA) talks continued in Montreal at the end of January, Mexican officials indicated an extension may be the best course of action in order to have more time to hammer out a new agreement with Canada and the United States. As of now, the next – and final scheduled – round of negotiations are to be held in Mexico. However, there is growing concern an agreement won’t be reached by then. The Canadian manufacturing sector goes right to the very top of the list in terms of industries that will be most impacted by what happens with this agreement.

To this point the U.S. has been lukewarm at best regarding the continuation of the trade pact, which is valued at about $1.2 trillion. The Trump administration throws the occasional barb at Canada but the main focus of disdain is with the trade imbalance with Mexico.

Canada, which this week presented a series of suggestions on how to unfreeze the talks, quickly welcomed the idea of extending talks, if need be.

“Canada does not believe that we need put an arbitrary deadline on these negotiations at the cost of a good deal for all three countries. ?We are happy to continue negotiating,” said a government representative.

It seems as if U.S. chief negotiator John Melle is going to need more convincing about having extended talks, as he’s offered no official statement about that being an option as of this point.

Meanwhile, the Trans-Pacific Partnership (TPP) is pushing ahead. With the United States out of the mix, Canada and the remaining members of the old TPP have agreed to a revised trade agreement following talks in Tokyo.

The new agreement comes one year after U.S. President Donald Trump withdrew his country from the TPP, leaving Japan as the largest country in a new 11-nation pact.

The deal is expected to be finalized in March. The concern from the union’s perspective, and specifically Unifor, is that it will mean more lost automotive jobs for Canada.

Investing in the Future

The federal and provincial governments continue to spend significant money on ensuring the next generation of manufacturing is able to compete on a global basis. Ottawa and the Ontario governments recently announced grants totaling nearly $100 million for automotive parts maker Linamar Corp. as it strives to continue to develop its advanced manufacturing technologies.

The Linamar investments are expected to create 1,500 jobs in Canada and help maintain more than 8,000 other positions.

The federal government will provide a grant of $49 million to the company and Ontario will provide a conditional grant of up to $50 million. The conditional grant will come from the province’s jobs and prosperity fund as part of a project with overall eligible costs of up to $500 million.

The funding will help Linamar build next-generation transmissions and drive trains, high-efficiency engine parts and develop technologies for electric and connected vehicles as well as collaborative robotics.

GM Tech Centre

A sizable boost in the arm materialized late last month with the official opening of GM Canada’s new Canadian Technical Centre in Markham, north of Toronto. The company announced the GM Canada STEM Fund, a C$1.8 million commitment for educational programs to encourage students in STEM (Science, Technology, Engineering, Mathematics) and inspire the next generation of Canadian technology innovators.

The CTC Markham Campus will focus on software development and innovation in the areas of next-generation active safety, in-car infotainment systems, and software and controls related to GM’s development of self-driving vehicles. Once it is becomes operational it will be the country’s largest new automotive and mobility software centre with more than 700 staff, leveraging an extensive network of university and local company partnerships.

The new GM Canada STEM Fund will build upon the successes of past programs, support new, national partnerships and initiatives focused on introducing elementary and high school students to STEM, with an emphasis on inspiring young girls to try science and technology, including through interactive, hands-on programs across the country.

At the post-secondary level, the Fund will also enable young researchers to complete their education through a new series of scholarships at leading universities. GM Canada announced that the first of these scholarships will be at the University of Waterloo, where it will create the GM Canada Innovators Award for students pursing graduate work in engineering.

“General Motors is redefining mobility and focused on realizing our vision of a world with zero crashes, zero emissions and zero congestion. We believe that to realize this vision, we will need to support far greater participation in STEM,” said GM Canada president and managing director Steve Carlisle. “We are proud to be marking the official opening in Markham by announcing that we are expanding our investments across Canada to inspire the next generation of female mobility innovators.”

The CTC Markham Campus is Canada’s largest automotive software hub and is the latest in a series of investments in innovation, including the CTC campus in Oshawa, Cold Weather Testing facility in Kapuskasing, 2908 innovation lab at Communitech in Kitchener-Waterloo, and coming soon, a new Urban Mobility Campus in downtown Toronto.

GM Canada is also engaging the wider innovation ecosystem across Canada with new university partnerships – most recently, a new partnership with the Creative Destruction Lab at the University of Toronto’s Rotman School of Business.

“CTC Markham represents a new kind of GM workplace, centred on collaboration, open design, and creativity,” said Brian Tossan, director of GM’s Canadian Technical Centre. “GM Canada is at the forefront of reinventing mobility right here in Markham. We are helping develop software and systems that will enable us to save lives, reduce emissions and create smarter and better ways to travel, work and play. We’ve had a great year of growing our workforce, and we’re not done yet; we are still actively recruiting several hundred engineers and software developers to help us achieve our vision.”

Dr. Feridun Hamdullahpur, President and Vice Chancellor at the University of Waterloo had this to say: “The University of Waterloo is proud to have GM Canada as a committed industry and research partner supporting Canada’s top engineering talent at Waterloo from scholarships to co-op job placements, we are excited that GM recognizes the need to support Canadian-led innovations and its generous donation of $200,000 will be instrumental in enabling Engineering master’s students to tackle the challenges facing our world today and in the future.”

“GM’s commitment to diversity in innovation by expanding their STEM program for young Canadian women, will inspire the next generation of astronauts, engineers, doctors and even video game developers.” GM is helping ensure that Canadian youth have the digital skills for the jobs of the future,” adds Navdeep Singh Bains, Canada’s Minister of Innovation, Science and Economic Development. “Congratulations to the company on the official opening of their new Mobility Software Tech centre. Proof once more that Canada is truly leading when it comes to the ‘car of the future’.”

Bombardier

Despite a number of well-documented setbacks, largely connected with its C Series jets, Bombardier Inc. of Montreal continues to be a major international force and recently scored a resounding victory when the U.S. International Trade Commission eliminated nearly 300% duties on its C Series commercial jet by unanimously voting against a petition filed by Boeing Co.

The four Commissioners voted unanimously that Boeing didn’t suffer harm from prospective imports of C Series planes.

“The decision is a victory for innovation, competition, and the rule of law,” the Montreal-based manufacturer said in a news release.

The decision came as a pleasant surprise because it was expected the commission would side with Boeing.

Bombardier continues to be a leading international player in aerospace and transportation and has expanded through the years to also produce regional airliners, business planes and recreational equipment.

Atlantic Canada

J.D. Irving, Ltd. plans to hire more than 1,500 people over the next three years as it looks to fill expanding new job orders.

The New Brunswick-based company needs people to help build ships in Atlantic Canada for the Canadian navy and to staff a $400-million tissue plant in Macon, Ga. where about 200 jobs are expected to be created.

On a broader scale, Irving projects a total of 10,400 hires across operations in Canada and the U.S. through 2020, with most of those workers needed to replace staff that retire or leave the company for other reasons. About 2,500 of the new hires will likely be students.

Labatt Breweries, Tri-Star Industries, Atlantic Industries Limited and McCain’s are just a few examples of large manufacturing companies that continue to excel and innovate in the Maritime Provinces.

The Future is Now

Canada’s economic growth last year was the fastest of the G7 countries with the national economy expanding by 3%. Where the country needs improvement is in innovation, where it typically ranks quite low against other western nations.

Growing sales to North American clients will be the main focus over the next several years with the U.S. manufacturing industry is also poised for an upswing.

In order to ensure the country’s manufacturing sector remains globally competitive it is going to require an ongoing commitment between businesses, governments and Canadians themselves, who need to adapt and obtain the skills necessary for this next generation of manufacturing to successfully compete, and win, on the world’s stage. Sufficient employee training, capital investment and research and development will ensure that happens.

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