Thank you, Mr. Chair, and good afternoon.
It's my pleasure to be here on behalf of Canada's 90,000 manufacturers and exporters and our association's 2,500 direct member companies to discuss what we think we need in budget 2023.
To set the stage, manufacturing represents about 10% of Canada's GDP. It produces two-thirds of Canada's value-added exports and employs just over 1.7 million people in good-paying jobs across the country. Since the very beginning of Canada, manufacturing has been the backbone of the Canadian economy, and it certainly drives our prosperity.
We must admit, however, that our industry is grappling with some of the hardest challenges it has ever faced. Chronic labour shortages, ongoing supply chain disruptions, massive looming transitional investments to get to net zero, and trade uncertainty all threaten the very existence of manufacturing and exporting Canada.
Now our members tell us, and our research confirms, that if we do not act now to resolve these challenges, we risk being shut out of the global advanced manufacturing transition that's happening. The pandemic reminded us how vitally important it is to have a strong domestic manufacturing industry, so I want to lay out how we think we should get there.
Number one is that Canada really must implement a national industrial strategy. This is needed to coordinate our efforts and initiatives into one overarching plan. We believe the goal of a national industrial strategy should be to double Canada's take of the OECD manufacturing investment from where it is right now at about 1% relative to our OECD countries to 2%. We call it the 2% challenge. It would bring billions of dollars of investment, moving us from about $25 billion a year—we're one of the laggards in the OECD—to on par, to about $50 billion a year.
Over the years, the government has commissioned experts to draft industrial strategies. Monique Leroux's work is the latest in this line, and that report has our full support. Budget 2023 should really move towards finally implementing that.
Number two is that we need to reduce labour shortages. Pandemic immigration backlogs must be addressed to encourage our government to dedicate all the resources required to do that. We must open up an introduction of a trusted employer stream for the temporary foreign worker program. In time, we need to aggressively—really aggressively—increase our intake targets to about 500,000 a year in the economic stream alone. On the other side of the coin, we have to help employers directly with training and upskilling and by providing them with money through the taxation system. The bottom line is that we need more workers, and we need funds to train them.
Number three is supply chain disruptions. The government's role is that it needs to increase and speed up investments in critical transportation and trade infrastructure. The supply chain task force will be issuing its report soon. We support their work, and we urge swift adoption of their recommendations.
Number four is that we really need to grow business investment and exports. Manufacturers need the federal government to increase incentives for innovation and for investment in the adoption of new technology. We must eliminate gaps in our incentive programs relative to our biggest trading partner, the U.S., specifically America's new Inflation Reduction Act. Extending the accelerated investment incentive is also key to helping manufacturers invest in the growth. With regard to boosting exports, governments should really help by expanding the trade accelerator program and should ensure that our trade import monitoring systems are world-class. Eliminating excessive export permit processing delays, which we've seen in the last few years, is one simple way to achieve that level of excellence.
Number five—and this is a biggie—is that we need to help manufacturers transition to net zero. The government should expand programs like the net-zero accelerator fund. We also need to specifically target SMEs, small and medium-sized companies, and help them with the net transitions by creating the SME net transition strategy. We have a net-zero strategy, and we would be happy to talk about this with the committee in more detail at a future time.
At the end of the day, the CME believes strongly that by addressing these five key areas with targeted investments and support for manufacturers we can ensure that our sector, and by extension all of Canada, prospers for decades to come.
Thank you. I'll wait for any questions.