Thank you very much, and welcome to our city. I admire you for your deliberations going across Canada.
On behalf of the City of Oshawa council I'd like to thank you for inviting me here today to provide some insights into Oshawa's manufacturing sector.
The manufacturing sector is vital not only to the Oshawa community but to all of Durham region. Before I expand on the great importance that manufacturing plays in our community, I will first provide an economic overview of the city of Oshawa with some highlights of Durham region.
The Oshawa census metropolitan area, containing Oshawa, Whitby, and Clarington, is the fastest-growing CMA in Canada, according to Statistics Canada. Oshawa leads Canada in GDP growth, and the Conference Board of Canada predicts that Oshawa will lead Canada in economic growth through to 2010. GM's Oshawa facilities are the largest in North America and create a significant demand for feeder industries. In Durham region hundreds of businesses are directly related to the automotive sector. Recently, Pival International, a logistics firm from Quebec, broke ground for their new Oshawa Logistics Centre, representing an investment of over $40 million and 250 jobs in Oshawa.
Oshawa has a workforce of 83,000 people, with over half of our workforce trained at the community college or university level. Oshawa is home to two post-secondary institutions, Durham College and UOIT, and to a Trent University satellite campus. UOIT has established a reputation for leading-edge research and development and has created strategic industry partnerships that benefit the local and Canadian economies. Adult training, apprenticeship, and customized corporate training programs are offered through Durham College.
Some of Oshawa's recent economic projects and initiatives include the brownfields renaissance community improvement plan, the downtown Oshawa action plan, and the Beacon project. In addition, Oshawa has been identified as a priority urban centre in the province's “Places to Grow” document.
Manufacturing is a vital component of our local economy. Over 51,000 jobs in close to 800 manufacturing businesses are in Durham region. Every dollar of manufacturing output is estimated to provide more than three dollars in economic activity. In Durham region, manufacturing sectors are interdependent. The strongest two sectors, energy and automotive, are intertwined, as are the subsectors, plastics and metals machinery. In fact, 32% of Ontario's power is produced right here in Durham region at Ontario Power Generation's two nuclear plants, located in Clarington and in Pickering.
I want to emphasize that we are a team here in Durham. Durham region, the local municipal governments, and our manufacturing partners are committed to working together to support the local economy. One example is the region's elimination of the large industrial tax class effective 2007. This is to level the playing field against other Ontario jurisdictions in order to help our manufacturers compete. In October of this year, the region of Durham hosted an economic summit that brought together over 100 business leaders to discuss challenges facing the Durham business community.
One of the challenges identified by our manufacturing community today is increased global competition. Our companies are facing significant competition from low-cost, high-value jurisdictions such as China and India. We need to focus on trade agreements that provide effective market access and look at where the opportunities lie in these emerging economies. R and D needs to be elevated significantly on the national agenda and we need to focus resources on R and D in our manufacturing sectors to allow them to lead.
Recommendation: create trade agreements that provide effective market access with other jurisdictions; support increased funding for research and development within the manufacturing sector in order to help companies compete globally.
Number two is rising energy costs. Durham is an energy cluster. It's one of the most well-positioned jurisdictions in Canada and is actively pursuing these solutions in a coordinated, systematic way. Government, businesses, and the university have joined forces to create the Durham Strategic Energy Alliance in order to develop energy production and reduction solutions for today's business, but our challenge is that we need resources to develop these partnerships so that solutions can be supported and accelerated.
Recommendation: create a national energy strategy that supports a competitive business environment, provides resources to support solutions for energy research and development, and creates a framework that ensures stabilization of energy prices for manufacturing; provide incentives to support and enhance energy efficiency targets.
The third item is the skilled labour shortage. Skilled labour shortages pose a significant threat to local businesses. Looming baby boomer retirements will take significant numbers of highly skilled workers at all levels out of the workforce in the next five to ten years.
Our recommendation is to place more emphasis on continued upgrading and provision of skills, including increased funding for apprenticeships. Provide incentives to small and medium-sized businesses in order to enhance training opportunities that address skill shortages.
Fourth is regulations and financial incentives. Industry needs an environment that supports industry competitiveness and it needs the ability to operate in a fair environment. Our recommendation is to create a national incentive program that allows municipalities to compete effectively with foreign jurisdictions in attracting new investment.
Fifth is a rising Canadian dollar. Manufacturing is a vital component of our local economy. Over 50,000 jobs in Durham region are directly attributed to manufacturing. This sector, particularly, has seen high exposure to international trade. Goods produced by the manufacturing sector are often priced in U.S. dollars, and as the Canadian dollar has risen, margins and competitive capabilities have decreased significantly. Our recommendation is that interest rate policies need to be adjusted in order to reduce the upward pressure on the Canadian dollar.
In summary, the manufacturing sector is vital to our local economy. Although we will continue to work together as a team to support the manufacturing community, we require the assistance of the provincial and federal governments to help overcome the bigger picture challenges that we face.
Thank you.