Evidence of meeting #17 for Industry, Science and Technology in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was sector.
A recording is available from Parliament.
4:25 p.m.
Senior Vice-President, Canadian Manufacturers & Exporters
A minute and 10 seconds. Fantastic.
On the first question, yes, PSAC is a member. I think it's maybe one of the worst names for an association to be Ottawa.
4:25 p.m.
Voices
Oh, oh!
4:25 p.m.
Senior Vice-President, Canadian Manufacturers & Exporters
But the petroleum services group shows the link between manufacturing services, and oil and gas, or natural resources, because about half of their members are manufacturers in the Alberta area. Many of those are our members. I know from talking to them a couple of weeks ago, that those Albertan companies are having a hard time keeping the lights on right now. Their order sheets are drying up, and there is significant concern that the prolonged downturn in oil prices is going to drive employment and manufacturing out of the province.
For those of you who don't know, although a question was asked about employment in manufacturing in Quebec, Alberta is the third largest manufacturing jurisdiction in Canada. It's about double now what B.C. and Manitoba used to be. They used to all be about the same. It's a critically important sector for that economy, and a lot of that is driven by the natural resources sector.
We will find out the details that you're asking for from PSAC. We'll get those to the committee clerk as soon as possible—hopefully in the next couple of days.
4:25 p.m.
National Director, Social and Economic Policy, Canadian Labour Congress
Mr. Chair, may I quickly speak up to defend the good name of the Public Service Alliance of Canada, which is a very honourable and admirable union that's an affiliate of the CLC.
4:25 p.m.
Liberal
The Chair Liberal Dan Ruimy
Thank you for entering that into the record.
We're moving on to Mr. Arseneault.
Mr. Arsenault, you have five minutes.
4:25 p.m.
Liberal
René Arseneault Liberal Madawaska—Restigouche, NB
Thank you, Mr. Chair.
I will address Chris Roberts first, then I may encroach on the questions of my colleagues Mr. Arya and Mr. Serré.
You said earlier that you rely on the federal government to establish alliances with the provinces, the colleges and the universities when it comes to the manufacturing sector. That is what I understood. Based on what we've been told by witnesses who have appeared before you—and I'm referring to the Canada development agencies in particular—there seems to be incredible cooperation between all Canadian provinces and all the colleges, universities and polytechnical schools.
Does the agency you represent already maintain close ties with all the colleges and universities across the country?
4:30 p.m.
National Director, Social and Economic Policy, Canadian Labour Congress
No, not as close linkages that we would like. Specifically, what I proposed was focused strategic venues that would bring all of the relevant stakeholders together in a particular industry, including labour, employers, industry groups, business associations, colleges, and various levels of government, to get all of the things, which Mathew Wilson just talked about, right. That includes all of the incentives, the investment promotion, the various levers that we want in place to build capacity in a specific industry together, and to get them consistent and right. You need all of the players at the table, and right now we don't have those relationships.
4:30 p.m.
Liberal
René Arseneault Liberal Madawaska—Restigouche, NB
Do you know if somewhere in the world, a country in the West, for instance, there is a council in the manufacturing world that we could draw inspiration from here, in Canada?
4:30 p.m.
National Director, Social and Economic Policy, Canadian Labour Congress
Yes, northern European countries have this co-determination, or co-operation, or coordination and collaboration to a much higher degree than Canada does at the workplace level, at the enterprise level, and at the sector level. Absolutely I would propose looking to northern European examples for this kind of experience.
4:30 p.m.
Liberal
René Arseneault Liberal Madawaska—Restigouche, NB
I'm from New Brunswick and, although it is a small province, it has a good manufacturing sector. We were speaking earlier about the food industry. I'm thinking of the company McCain, which is very close to my home. This global company exports a lot of its products. I don't know if it respects the 18% or if it exports more than it produces. I don't know the ratio.
My question is for either of you.
Canada's population is the worst in terms of aging, which is reflected in the workforce. Our workforce is aging.
How can we address this problem?
Is using outside expertise and skills the only solution, or should we instead offer our workforce training in colleges or elsewhere?
4:30 p.m.
Senior Vice-President, Canadian Manufacturers & Exporters
I think I met with you with Calla Farn from McCain's talking about some of these issues a couple of months ago, and they're really top of mind for us.
There are two kinds of challenges going on at the same time. A decreasing percentage of our population is in the workforce, and that is going to accelerate substantially over the next five years. We're already seeing skilled labour shortages in a lot of key manufacturing sectors that are actually slowing down growth. I mentioned that when I was in Midland a couple of weeks ago, several companies were talking about a $1 million expansion. We're talking about a town of only about 20,000, so it's a pretty big expansion and pretty big job creation.
They can't get the people to actually do that $1 million expansion. Certainly in our studies in the past when we've looked at these issues, we've seen that companies are actually withholding investing in their operations because they can't find people to do the jobs. So, there's a real concern on our part.
The second big part of the concern is the changing types of jobs. These aren't the same jobs that they were 20 to 30 years ago. Things are changing in the manufacturing sector. While there are a lot of the traditional jobs, such as welder or electrician, and a lot of the skilled jobs are still really important, now, more than ever, companies need multi-dimensional workers who are able to do multiple jobs at the same time. Often, our education system is not set up to train people that way, so that's another challenge.
What are we doing or what should we be doing about it? I guess I'd start by going back to something that Ms. Roberts said a few minutes ago, which is that we need to start with our youth. We're not getting enough youth involved. The challenge of manufacturing is that everyone thinks that manufacturing is kind of the way it was in the sixties and seventies: dark, dangerous, and dirty. They don't think of creating airplanes or jets or cars or guitars or really neat things that are going on. They think of steel, cutting down trees, and mining.
We need to reshape what modern manufacturing is: it's high-tech; it's innovative. If we can change the perception, it would get more youth in.
May 31st, 2016 / 4:35 p.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Thank you, Mr. Chair. I'll start with a couple of questions regarding this, and then I have spoken with you about a question I have and a motion I want to put on the floor, which I think we'll deal with afterwards.
Mr. Wilson, when you mentioned being proud of manufacturing, talking it up and showcasing where we've had successes, I couldn't agree with you more.
One of the concerns I have, though, is that recently we've had, and still to some extent enjoy, a low-dollar environment. At the same time, we've seen a steep reduction in the number of those working in the manufacturing industry. In a little one-minute window, because I have to manage my time, could you explain why?
4:35 p.m.
Senior Vice-President, Canadian Manufacturers & Exporters
Do you mean the relationship between the dollar and the number of people working in the sector or...?
4:35 p.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
The past has dictated that as the dollar goes down, the manufacturing industry goes up, because it's cheaper to buy from Canada. I understand there are two sides to the equation, because you're buying it at a higher cost.
4:35 p.m.
Senior Vice-President, Canadian Manufacturers & Exporters
That is a real challenge. Certainly a decade ago when, as Chris was talking about, we lost about half a million jobs in the manufacturing sector, that was largely due to a bunch of companies that were relying on a 65¢ dollar to remain competitive. One of the biggest fears we have right now is that companies will get used to and rely on a 75¢ dollar.
We tell all of our clients to prepare for a dollar at par and then everything else is just gravy, but that they should take that not as profit to put into their pockets but as profit to actually reinvest in their companies, to create the new technologies, to invest in their machinery and equipment, because that's where the long-term growth is going to come from. That's what Germany and the U.S. do the best, and we don't.
4:35 p.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Obviously, taking advantage of the low dollar, it is a good time to invest, and especially if you're purchasing the technology from other Canadian companies, you're gaining.
In terms of scaling up, you mentioned there were perhaps some challenges in that area. Have you looked at the possibilities of equity crowd funding to help with scale-up? I'm a former banker, and it was often frustrating that we couldn't put money into the places we wanted to because there was a box and it didn't fit. I know you've probably heard that a million times. Can you comment on that?
4:35 p.m.
Senior Vice-President, Canadian Manufacturers & Exporters
Too often manufacturing is outside the box as a whole, but Martin can probably talk better to that than I can.
4:35 p.m.
Director, Policy, Innovation and Productivity, Canadian Manufacturers & Exporters
I did some digging in terms of both crowd funding and equity crowd funding, and it seems that it works very well for consumer products, but for business to business, it doesn't work that well, and most of manufacturing in Canada is actually B to B, giving to a supplier of another company.
I think there's potential there in some areas like wearable electronics, things that you buy as consumer. Maybe one day we'll see some platforms of B to B equity crowd funding where maybe a larger company can invest in a smaller company that has the technology, something like that, but we haven't seen any of those platforms yet.
4:35 p.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Right now it's just consumer investment, and it's limited based on the regulations within each jurisdiction.
4:35 p.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
In terms of championing manufacturing, what would you say to someone who says they think that certain parts of our economy should transition away from manufacturing?
4:35 p.m.
Senior Vice-President, Canadian Manufacturers & Exporters
Boy, that's another loaded question. Thanks.
4:40 p.m.
Senior Vice-President, Canadian Manufacturers & Exporters
I guess I'd say that there are 1.7 million Canadians who are directly employed in the sector, and if we're transitioning away from them, there had better be a good future for them.
Chris talked about the wages in manufacturing. On average, manufacturing pays about 120% of the average wage in Canada. It would be a huge problem if we started transitioning away from manufacturing.
The other thing I'd say, just from a national perspective, is that we didn't talk about innovation and the creation of new products exporting to the world. Seventy per cent of our exports are manufactured products, so our wealth generation would drop substantially if we transferred away from manufacturing.
The other thing is our innovation capacity would drop. Fifty per cent of all private sector R and D is done by the manufacturing community. We need the manufacturing sector to drive wealth, creation to drive jobs, and to drive innovation for the rest of the economy.