Thank you, Mr. Chair and members of the committee, for the opportunity to address you today on behalf of the Association of Equipment Manufacturers, or AEM.
AEM is a trade association representing manufacturers of equipment for the agriculture, forestry, construction, and mining sectors. We make the machines that build roads, extract resources, move material, and plant and harvest crops. AEM members range in size from multinationals like Caterpillar to smaller Canadian firms like my own, Sellick Equipment, located just 30 kilometres south of here in a small town called Harrow.
For the last 42 years we have continued the business our father started. We produce material-handling equipment--rugged forklifts used in rough-terrain applications, including construction sites and mines around Canada and the United States.
We export half of our equipment to the United States through the Windsor-Detroit corridor. Our supply chain runs back and forth on a daily basis across the bridge. We are constantly feeling a pinch at the border with congestion and delays. Most of the other half of our products are delivered to customers here in Canada, three-quarters of which are shipped west, where they're used extensively in the oil sands in Alberta and in the potash industry in Saskatchewan.
However, the decline in the North American economy has meant tough times for our business. Since the fall of 2008, we've had to downsize our company by 27 people, a significant number in a town of only 2,000. These were good-quality manufacturing jobs.
Federal government programs have been instrumental in helping us deal with this slowdown. The work-sharing program has helped us to retain a skilled workforce. We applaud the government for making this program happen. These kinds of programs have made a difference in our operations and the operations of AEM member companies across the country.
Like all Canadian manufacturers, AEM members must continually invest in modern equipment that allows us to achieve unmatched productivity gains. The accelerated capital cost allowances for investments in new equipment that the government has introduced, lowering these investment costs, have benefited my company directly. These accelerated writeoffs allowed us to invest in new manufacturing software, boosting our productivity.
My fellow AEM board member Gary MacDonald, from MacDon Industries--they make agriculture harvesting equipment--has been investing in new enterprise software as well, and he too has seen the benefits. These tax policies work.
This kind of cooperation from the government in creating a competitive environment for business is essential if we are to continue to have strong equipment manufacturers in Canada.
With the prospect of another recession before us, manufacturers like my company face increasing competitive pressures and challenges. Given these conditions, AEM has four recommendations that we would ask the finance committee to consider in its report to Parliament.
One, make the two-year writeoff for manufacturing and processing machinery and equipment a permanent part of the tax system.
Two, aggressively negotiate with our trading partners to eliminate trade barriers, especially those involving the U.S.-Canada border.
Three, reduce the regulatory burden that delays major investments in energy projects.
And four, make infrastructure projects a priority to stimulate the economy, drive demand for manufacturers, and ease the movement of goods.
Each of these recommendations will help Canadian equipment manufacturers invest, innovate, and compete in the global marketplace. I know first-hand that these policies work. I've seen it from my own company's shop floor and in the facilities of AEM members across the country.
Thank you for undertaking this study and for your consideration of AEM's submission. I look forward to your questions.
Thank you.