CME urges bold action on industry challenges noted in Fall Economic Statement
November 7, 2022 by Manufacturing AUTOMATION
Canadian Manufacturers & Exporters (CME) released a statement appreciating the acknowledgement of key challenges faced by Canadian manufacturers in the recently released Fall Economic Statement. The challenges include labour shortages and investment incentive gaps caused by the U.S.’ Inflation Reduction Act, among other things. However, CME notes that the economic report, released by Deputy Prime Minister Chrystia Freeland on November 3, falls short on taking bold action to address them.
“This is a good first step, but Canadian businesses, and manufacturers in particular, cannot afford to wait years for government to address these major competitiveness problems. Other countries are pouring billions into their industrial sectors and are finding and training the workers needed to fill the jobs of the future. If Canada does not follow suit, we will lose out on manufacturing investment and the good jobs that come with it,” said Dennis Darby, president and CEO of CME, in a press statement.
Manufacturers are featured prominently in the FES and the government’s plans for future economic growth. CME explained in the statement that it is happy to see the government commit to investing in Canada’s advanced manufacturing competitiveness. Manufacturers look forward to discussing these issues with the government directly.
A new Investment Tax Credit for Clean Technologies equal to up to 30 percent of the capital cost of an investment in low-emission vehicles, low-carbon heating equipment and green energy generation will help the industry in its net zero transition, says CME Furthermore, investment tax credits for clean hydrogen of up to 40 percent is moving forward and is good news for the industry.
The Canada Growth Fund, a key initiative announced in Budget 2022 received more definition in the FES. However, manufacturers will need details and are eager for this program to get off the ground.
On the labour and skills shortage front, the industry was happy to see $250 million announced for skills development through the new Sustainable Jobs Training Center and other ESDC initiatives. Moreover, $1.6 billion for processing and settlement of new immigrants including $50 million in 2022-2023 to reduce immigration processing backlogs is welcomed and a direct ask of CME. Finally, $800 million for youth job training and young Canadians will help manufacturers hire more students and co-op students. This is part of CME’s request to promote the industry to youth and underrepresented groups.
The new two percent tax on share buybacks is concerning, notes CME. Canadian businesses do not need a new tax at this time and this proposed rate is double the U.S. rate and will put Canadian firms at a tax disadvantage. Details of this new measure are still forthcoming, but this will not be welcomed news in the industry.
“CME sees a lot in the FES that we can build on, but the clock is ticking, particularly on matching the manufacturing investment incentives found in the US Inflation Reduction Act. We will continue to expect, and push, for strong and decisive action to address all our challenges,” concluded Darby.