CME urges swift action from government to support manufacturing sector and drive economic growth
November 23, 2023
By Manufacturing AUTOMATION
Canadian manufacturers want the government to move e quickly to enact measures to increase the country’s competitiveness, said Canadian Manufacturers & Exporters (CME) responding to the federal government’s Fall Economic Statement. CME notes that the statement currently addresses some of the uncertainty Canadian manufacturers have around the implementation of investment tax credits.
The Fall Economic Statement reportedly provides a timeline for implementation of the five investment tax credits (ITCs) aimed at helping manufacturers transition to a clean economy and respond to the U.S. Inflation Reduction Act (IRA). According to the economic statement, the tax credits will be delivered by the end of 2024.
CME states that manufacturers have been pushing the federal government to provide certainty around the timing of these measures, fearing they are falling behind the U.S. in the wake of President Joe Biden’s massive investment in clean tech through the IRA. The establishment of the IRA, which promises to support the manufacturing industry with at least US$369 billion over 10 years, is already attracting massive investment to the United States, says the organization.
Since its inception, the IRA has reportedly generated more than US$110 billion in private investment and created 170,000 jobs. This is in addition to other measures, such as “Buy America”, which has also helped bolster the American economy.
Meanwhile, says CME, the Canadian response, which includes the proposed ITCs and separate agreements containing IRA-equivalent benefits with battery producers and automakers, has been slow, and manufacturers want the ITC implementation accelerated to enable them to play on an equal footing and continue to be competitive.
“Although this is a step in the right direction, as it provides a little more certainty for our manufacturers, we are still behind. The race to develop a clean economy is picking up speed, and we need a robust response. We encourage all parties to work with the Canadian government to implement these initiatives as quickly as possible,” said Dennis Darby, president and CEO of CME.
The Fall Economic Statement includes a number of measures aimed at boosting the supply of housing, an issue of growing concern to manufacturers. CME’s recent report Manufacturing Canada’s Future highlights that companies across the country are struggling to find workers, and a shortage of housing is a key factor. As such, CME recognizes the measures announced, including enhancing and expanding the Apartment Construction Loan Program and the Affordable Housing Fund to build more homes, faster.
“Manufacturing remains a cornerstone of Canada’s economy, directly generating close to 10 percent of Canada’s real gross domestic product (GDP), making up one-quarter of its business research and development spending, and accounting for 60 percent of the country’s merchandise exports. However, sustaining growth in the sector growth requires a strong partnership between industry and government, and CME looks forward to working with them to achieve all of our mutual goals” concluded Darby.
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