Human Resources Committee on May 28th, 2020

[Jenny Kwan, NDP, Vancouver East, BC]

Some of the local business people who try to re-enter and so on are not in the network so to speak, because they're small scale businesses, and so how to access this material becomes a major barrier. Perhaps there can be some coordinated effort among levels of government and the private sector to figure this out, because if those businesses don't survive, our local communities won't survive, which of course will impact the manufacturing community overall.

[Mathew Wilson]

I agree 100%. I don't know what else I can say, but, yes, absolutely, and there needs to be.... Certainly groups like CME, local chambers of commerce, are trying to coordinate and do this type of work, but if you're not part of a network, it still is very hard to get that information. It's a good reason to join a private sector association like ours, but it is part of the benefit of being part of that network.

I'm sure all your offices are getting swamped with these types of questions, and there are a lot of good resources. Certainly in the manufacturing sector, we've created our own website to help them. It consolidates all the government information and the best private sector information. For example, what does a safe return to work look like in a manufacturing environment in a COVID-19 world? What type of barriers do you need to put in place? How do you protect your employees? We've written guides on that. We have done extensive work on it, and we're providing it free of charge to anyone who wants to go on our website and get it. Those tools are invaluable to small companies who don't have internal resources. The tools are out there. You just have to know where to look in some cases.

[Jenny Kwan, NDP, Vancouver East, BC]

I think it also speaks to the importance of paid sick leave, because some people don't have access to paid sick leave. I know that it's not the case for all companies, but that certainly is the case for some.

I have constituents who at the beginning of the COVID-19 pandemic actually had to quit their jobs because they could not access sick leave. They did not feel that they could put others in jeopardy. They had symptoms, although they didn't know if it was COVID, but still, they were concerned about it.

I just want to flag that as an important component to make sure that we get that in place.

[The Chair, Liberal, Sean Casey]

Thank you, Ms. Kwan. You're past time.

We're going to go to Mr. Vis, please, for five minutes.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Thank you, Chair.

Mr. Wilson, you've said a lot today that requires a lot of additional analysis. All of the questions and answers so far have been very helpful. I've been taking notes as we've moved along and trying to rewrite what I was going to ask you.

First off, I think it would be safe to say that had we not increased the wage subsidy from 10% to 75%, a lot of our manufacturing sector would be struggling even more than they are right now. Would that be correct?

[Mathew Wilson]

Very much so.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Okay. Excellent.

On GM, the government announced that they were going to produce 10 million masks, but there have been other estimates stating that Canada needs about 3.3 billion masks. How is Canada's manufacturing and export sector adapting to meet this challenge?

[Mathew Wilson]

In the survey that I mentioned, we actually found that almost a quarter of the companies that responded had shifted to manufacturing some type of PPE—face shields, masks, gowns—and that's right across the country. The response has been incredible. It really has. I think Canada should be incredibly proud of what the manufacturing sector has done; certainly, I am. I'm a long-time advocate for the sector, so of course I'm always proud of them, but I think it really has shown the critical value that manufacturing can bring to the country.

At the same time, I don't think we need to shut ourselves off from the world and say that we need to make all this stuff at home, in part because we're never going to be able to manufacture everything that we might possibly need for any type of crisis. Those trade agreements and our relationships with other countries are really, really important. I think what happened with the United States through part of this was regrettable, but thankfully it got sorted out through a lot of hard work by a lot of people.

Something we've talked about with some officials, for example, is, could we create something like a defence procurement act like we have with the United states to introduce something around PPE and other critical devices [Technical difficulty—Editor].

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

That's an excellent point. It actually brings me to another question that I wanted to raise.

Given the events that have happened with China this week and some of the things we've been hearing in the media about possible trade sanctions and a frayed relationship, how do you think Canada's manufacturing sector can play a role in improving Canada's security, either by enhancing our trade relationships or by ensuring that we have enough domestic supply to meet the needs not just for COVID-19 but for other crises down the road, as you've mentioned?

[Mathew Wilson]

There already is, I think, a growing demand. I think there's been a shift away.... China became kind of in vogue about 20 years ago, when they entered the WTO. It became easier to get stuff into our market, because it was a low-cost manufacturing jurisdiction, although they're not as low cost as they used to be. Also, I think we've found out through this and other events that they're not a stable and secure supply of key things at key times. That's not just for PPE. That's also for sub-assemblies and other things that manufacturers use and import, or for consumer products and other things like that.

I don't think the demand for China and Chinese goods and their role in global supply chains is going to change immediately, but I think that over time there's going to be a real opportunity, and there's going to be a shift in consumer, business and government demand for more locally made products. I don't just mean “buy Canada”. I mean that it will probably be more of a “buy North American” type of approach in leveraging things like the Canada-U.S.-Mexico free trade agreement to bolster up the domestic manufacturing capacity within this region and to supply yourselves first and then export from there.

We were super thrilled that in that agreement there's a very little known clause in Chapter 26 that talks about domestic “North American” industrial “competitiveness”. It is basically about how are the three countries going to work together on domestic competitiveness. That's the key. If we don't fix our competitive imbalance that we have with China and the rest of the world, we never will stand up the size of manufacturing sector that I think we can or that we deserve.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Thank you. I'm going to go into another couple of questions really quickly, because I'm on short time here.

You mentioned that consumer spending is part of a recovery approach. In the last election, the Conservative Party considered bringing back programs for, say, an efficient furnace, or for replacing windows at home and getting a grant from the government. Would you guys be in support of similar programs to help bolster consumer spending moving forward?

[Mathew Wilson]

There are a number of things that governments of all stripes have used over time. Cash for clunkers is another one, as well as home renovation tax credits and efficiency tax credits. All of those would be welcome. It's for the major purchases that you need to get things moving.

The key part of it is that if you have a cash for clunkers program and you tie it to some sort of domestic manufacturing production, it not only boosts consumer spending, but also manufacturing activity. It doesn't have to be just a made-in-Canada program, but you could have some type of content levels on them.

Home renovation is huge. We manufacture a massive amount of those types of things in Canada: pipes, shingles, windows, doors, all of that kind of stuff.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Thank you. That's super helpful.

[The Chair, Liberal, Sean Casey]

Thank you, Mr. Wilson.

Next we go to Mr. Vaughan please for five minutes.

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

Thank you for the insight, Mr. Wilson, in particular around some of the challenges we've faced but also some of the success we've had around manufacturing.

As we start to restructure, one of the things we know is that the group that has been hit the hardest in this are women in labour force.

As you start to look at, as you say, restaging the relationship between employers and employees, that's going to be a difficult one to deal with without supports around family care—mainly child care, but also, in this case, senior care.

What do you see as a way forward, to make sure that we get women back into the workplace as quickly as possible? What would you like to see to support manufacturing in this country?

[Mathew Wilson]

For a long time, we've been big promoters of advancing more women in manufacturing. We have a massive skills shortage, as I mentioned, and one of the problems we have is self-identification. We don't have enough women in the workforce. Only around a quarter of the workforce is women. That's a huge problem.

We actually have a challenge out there to increase the number of women in the manufacturing environment by 100,000. Our members, manufacturers across the country, provide great supports, on-site child care, for example, at some places.

Working with this government and the Minister for Women and Gender Equality, we've launched a program to try to attract more young women and girls into STEM careers, for example. That's where it starts. We are not going to change it over night, but we need get more women and young girls into education programs that are directed more at STEM. A lot of those engineering jobs, accounting jobs and the lawyers that manufacturers hire are reliant on STEM skills, and there are just enough women going into those fields. We need to fix the intake of them to be able to fix the long-term problem we have with not enough women in the sector.

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

I just wanted to restate that the role of family supports—in particular, child care, but also elder care—is going to be a critical part of returning your full labour force back to the job site.

[Mathew Wilson]

Yes.

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

In terms of re-opening, much of what you do takes place under provincial labour laws and provincial labour codes. However, is there a role for the federal government to establish guidelines for re-opening so that firms aren't doing it on an ad hoc basis, but rather that there's sort of a [Technical difficulty—Editor] to measure safety, to measure the capacity for manufacturers to operate safely?

Would you be open to working on federal guidelines that provincial guidelines could be leveraged off of?

[Mathew Wilson]

Yes, absolutely.

In some of the larger provinces—Ontario, Quebec and Manitoba, for example—where the bulk of manufacturing takes place in the country, they have large sophisticated sectors, and a lot of the companies actually work in all three jurisdictions.

The more you can get companies that have standardized, singular, regulatory approaches on anything—whether its PPE or health and safety in the workforce—the better. You obviously have a political issue on your hands, but certainly from a practical perspective, it makes sense to harmonize the guidelines approach as much as possible.

That's what we're trying to do, and it's the advice we're giving to our members, for sure. In fact, most of the guidelines and advice we're giving come out of Manitoba. We have a group in Manitoba called Made Safe, which is partly funded by the Manitoba government, and that's our centre of expertise in the country. It's not Ontario; it's not Quebec, but actually Manitoba. That's what's being used by us as the guidelines for across the country.

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

It's not normal for us to hear industry come forward and talk about the need for good strong regulation, as well as investments in social programs, as a way of mounting a competitive and healthy business environment. I'm glad to hear you say that. We usually get advice to cut red tape, privatize everything and let people fend for themselves.

That said, good strong social programs and smart regulations do incur costs, both for the manufacturing bases and also for government.

As we move towards providing those supports, there is a lot of money being spent getting us through this pandemic, and there'll be a lot of money spent recovering.

How do we tax and spend our way smartly to make sure that we both create those smart regulations and those social supports, and also create competitiveness for you to rebound the industry?

What's the balance that you're looking to be struck?

[The Chair, Liberal, Sean Casey]

Give a short answer, please.

[Mathew Wilson]

First, I'd say that smart regulations could save everyone money. The problem that most businesses have is the dumb regulations that cost everyone a lot of money, including government. I think there's a big difference between the two, so let's be careful on that.

The second thing is that we can't tax our way out of this. We're going to have grow our way out of it. We need to make sure that we have really smart economic policies that drive growth long term. If we start driving up taxes, it's going to drive investment out of the country, and that's going to cause more problems.

I'll just leave it at that, succinct and short.

[The Chair, Liberal, Sean Casey]

Thank you, Mr. Wilson.

Next we will go back to the Conservatives, please, for five minutes.

Mr. Vis, please.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Thank you.

Just on the last point raised by Mr. Wilson—and it's really, really important—I don't think Canadians want a tax increase when we're trying to get our economy back.

Mr. Chair, I'm going to ask one question, and then I'm going to pass it over to MP Kusie.

Mr. Wilson, would your organization be interested in exploring a new capital cost program to perhaps help manufacturers in Canada defray some of the additional costs they might be incurring to meet the new demands in a post-COVID world?