Manitoba budget not up to the mark, says CME

Canadian Manufacturers & Exporters (CME) shared in a press statement that while its members were pleased to see positive measures in Manitoba’s budget, the association remains concerned these measures don’t go far enough to address what the Bank of Canada has called a productivity emergency.

The widening productivity gap between Canada and other jurisdictions is driven in part by stagnant investment in the sector, and in turn, negatively affects the standard of living for all Manitobans, shares CME. The current budget contained important social, health and education measures that will benefit all Manitobans, yet manufacturers are still waiting to learn more about the government’s vision for manufacturing, adds the association in its statement.

“Manufacturers understand very well that the economic horse pulls the social wagon” says CME senior director of marketing and communications Jill Knaggs. “Given that manufacturing is the backbone of the provincial economy, with 26.4 billion in sales that generate 10 per cent of provincial GDP, we would like to have seen a stronger focus on encouraging investment to help our members grow their businesses and create opportunities for workers and their communities.”

Manitoba’s diverse manufacturing economy has  protected the province from steep swings in economic outlook. Availability of hydro-electricity, a skilled workforce and an enviable position at the heart of the continent further add to the province’s economic advantage, states CME. However, Manitoba can no longer claim to be the low-cost jurisdiction as it once did. With steep U.S. competition driven by President Biden’s Inflation Reduction Act (IRA), labour disruptions to critical infrastructure and inflationary pressure, manufacturers are reportedly feeling the pinch when it comes to investing locally.

CME states that it has long called for an increase to Manitoba’s Industrial Tax Credit from eight to 10 percent and for the measure to be made permanent. Not included in the budget, the credit would have accelerated economic growth in the province and created more good jobs for Manitobans, spurring the capital investment needed to address the productivity crisis the country faces. CME is also concerned about the government’s intent to ban replacement workers, which would disrupt a fair and balanced bargaining process.

While sector-wide manufacturing measures were notably absent from the budget, it did include a $50 million commitment to create a Manitoba-specific Strategic Innovation Fund, which CME welcomes as a signal of the province’s commitment to strengthening Manitoba’s reputation as a jurisdiction of choice for growing businesses.

“CME applauds a fiscally responsible budget and understands the challenge the government faces,” adds Knaggs. “The Kinew government has been committed to listening and has met frequently with CME and our members. While we had hoped to see targeted supports for the sector, we will continue to work with the province to overcome barriers to economic growth and signal that Manitoba is open for business.”