Thank you very much, Mr. Chairman.
Bienvenue à Nouvelle- Écosse. I'd like to thank you very much for coming to Halifax. I really welcome this opportunity to share some of the perspectives of manufacturers in Nova Scotia, in this region.
I think the committee would be very familiar with the work generally of the Canadian Manufacturers and Exporters, or CME. You'd be familiar with the 20/20 consultation initiative that started a few years ago. Our senior vice-president, Dr. Jayson Myers, appeared before this committee and provided input into your interim June 2006 report.
I guess what I can share is a little bit about the perspective of manufacturers and exporters here in Nova Scotia. I will start by stating probably the obvious, that this is not Ontario or Quebec when it comes to manufacturing, and for that reason it's a little bit of an untold story. Even with our own stakeholders here in Nova Scotia we find that many people are not aware of the impact and the contribution offered by the manufacturing sector to the province.
We have less than one million people, and yet 55,000 jobs, really high-paying, good jobs with excellent benefits, are provided by manufacturers, including by my colleague here at the table and by other presenters today. This is a big chunk of our economy. It represents about 10% of our economic activity in Nova Scotia. On a percentage basis, that's comparable to the impact of manufacturing in Alberta and in British Columbia, so it's important. Our challenge is trying to keep that on the radar for all of our stakeholders, including government, so thank you for asking us here today.
Getting back to our regional differences, I'd like to highlight the fact that manufacturing in Nova Scotia, and I think this may be true in other areas of the Atlantic as well, is very much rural-based. Although we have excellent representation here in the Halifax urban area, our manufacturing is very solidly placed in the rural areas. It's an important part of the economy for those municipalities and for the province as a whole. Our challenge, again, is to make sure that all decision-makers are aware of that.
With the CME, one of our main goals, of course, is to track the interests and concerns of our members. We do that in different ways. I will be referring to a document here, which, sadly, with only three days' notice to be here, I could not provide in French, but I really do recommend for the later consideration of the members. It's entitled Balancing Business in Global Markets. I think you would be familiar with it. It's the annual management issues survey that CME conducts.
The document is very comprehensive. It includes approximately 1,000 survey results from manufacturers across the country. You'd probably be interested in some of the latest results. It may give you a bit of an update on your June report, for example.
You won't be surprised to know that rising business costs are considered to be the number one challenge facing the manufacturing sector. Of course that would include taxes and that would include energy; that's not unusual. The volatile Canadian dollar is an issue for our manufacturers across the country, and here too, of course.
The lack of skilled workers is a major concern that's been identified across the country, but it's a particular issue here in Nova Scotia. Our particular demographic, an aging workforce, is a serious issue. Our members tell us they're having difficulty accessing even unskilled workers. In the east we have a further challenge here in that the booming economy in Alberta has become very attractive to our skilled workers and to our unskilled workers. This is an issue that all of my colleagues in Atlantic Canada are coping with.
If we have a chance later, I'd like to speak to you about how the CME is addressing this through a couple of initiatives. One is called “icosmo”, which is an online opportunity to match up our businesses here with Alberta's. The other initiative is with a very targetted buyer-seller forum that we will be supporting in Alberta. Again, the mission for us here, and for me in particular, is to keep our manufacturers prospering here and to give them more opportunities elsewhere in Canada.
Getting back to that list of challenges, which is your number one concern, the cumulative effect of taxes is a big problem. Of course this drives up the cost of labour. So you can see that's a particular issue for us. Like all other manufacturers in Canada, we are concerned about the possible slowdown of the U.S. economy, because that's a big impact for us.
Another item I'd like to share with you is a collaboration, which is always worth celebrating, among 21 manufacturing-related industry associations and the CME. These groups represent every major sector of manufacturing, including automotive, aerospace, mining, forestry, and consumer products. This group has prepared a submission to the Prime Minister. That was done on November 7 in a letter from the coalition. I did provide an English and French version of that letter. I hope the members will be seeing it.
I'll just quickly run through some of the recommendations in that letter. One will be familiar from our earlier presenters, and that is a two-year writeoff for the capital cost allowance for investments in new manufacturing, processing, and the associated information, energy, and environmental technologies with that.
Another recommendation is that government should maintain its commitment to lower the federal corporate tax rate to 18.5% by the year 2011, and also undertake to reduce it by a further 1.5%, to 17% by the year 2012.
The group is asking for an improvement to the scientific research and experimental development program, which is universally referred to as the SR&ED or SRED tax credit system, so that the credits would be refundable and exclude them from the calculation of the tax base, to provide an allowance for international collaborative R and D and to extend the tax credit to cover the cost for patenting.
Another recommendation of the collaboration is to introduce a training tax credit that would be creditable against employment insurance premiums.
The final recommendation is to effectively enforce the federal user fees act to increase accountablity and to require departments to set internationally competitive regulatory process standards. This would be an initial step towards a more effective, timely, and cost-effective regulatory regime.
I hope the members will have a chance to look at that submission and give it some consideration.
One area that is of interest right now to CME nationally relates to some initiatives the government has taken on the west coast in announcing the Asia Pacific gateway initiative. CME nationally feels that this is a great initiative to help Canada to achieve global competitiveness in trade. Our national president, the Honourable Perrin Beatty, has spoken in favour of something that would kind of tag on to this, and that's the idea of a comprehensive national logistic strategy. We feel that would allow Canada to become a pivotal player in an integrated North American logistic system, so that it would include not just the more obvious players, but the manufacturers, shippers, ports and airports even, as well as rail and road transportation, the warehousing facilities, telecommunications, and border security. So again the idea is towards a national logistics strategy.
Here in Atlantic Canada we see marine transportation as an enabler of regional economic development. When you have your later tours on this visit I guess you'll see some of the advantages we have here in Atlantic Canada. Obviously the ice-free ports are an advantage, and you'll hear about costs and transit time advantages for our ports over New York and over the rest of the northeastern seaboard. We have the ability to expand container rail transfer and direct barge transfer here in Halifax. And elsewhere in Nova Scotia there's a potential for a dedicated container water transfer terminal; that's in Port Hawkesbury.
So there are a lot of advantages here, and we see marine transportation as something that can really boost the regional economy.