Good afternoon. My name is Jerry Dias. I'm the national president of Unifor. With 310,000 members across the country, we are the largest union in Canada's private sector, and more than one-third of our members are in manufacturing.
Unifor represents 86,000 members in advanced manufacturing, including auto assembly, auto parts, aerospace, shipbuilding, public transportation equipment, electronics, food and beverage, and the list goes on. We have another 45,000 members in value-added resource manufacturing industries, including metals, forestry, and petroleum products.
On behalf of these members and their families and communities, I welcome the opportunity to share our views on the challenges, opportunities, and policy needs of this absolutely vital sector of the economy. I think it is also important to note that this conversation here on Parliament Hill is long overdue. It is certainly refreshing to see a government in Ottawa prioritize the manufacturing sector in the work of this standing committee, identifying manufacturing as of strategic importance to the economy, and to work with colleagues from all parties to realistically assess the situation, craft solutions, and make progress.
I cannot emphasize enough that this is such an important change in outlook. As you will hear in my remarks, you all have an incredibly important role to play as policy-makers to build the success of Canadian manufacturing.
I am sure that by now you have been well briefed by all of your policy experts and have been hearing from every witness at this committee about the importance of manufacturing, so I will not spend too long on that, other than to add my voice to those that keep reminding our elected representatives about the vital role of manufacturing in the wider economy: 11% of GDP, 1.7 million direct workers in decent jobs, two-thirds of Canada's exports, and 80% of private R and D spending. I want to emphasize that manufacturing is in fact not yesterday's industry, but rather it holds the potential for our future.
Given the latest crash in commodity prices, oil prices in particular, I hope that the lesson has finally been learned that Canada needs a balanced economy. We cannot sustain just by digging stuff up and selling it, nor can we just serve each other coffee and sell each other shoes in the service sector and call it a viable economy. Canada needs to make things. We need to apply our knowledge and expertise, we need to add value to our resources, and we need to continue to be world leaders in advanced technology, productivity, and innovation.
By the way, we already do all of this. I am here today after a lost decade for Canadian manufacturing. We have lost a lot of ground and squandered a lot of opportunities. Although manufacturing in Canada is very diverse, a common thread just about everywhere over the last decade has been the near complete failure of federal policy leadership, a period in which more than 450,000 manufacturing jobs have been lost, or nearly one out of four. In all that wreckage, tens of thousands of our members lost their jobs. Over this period, the former federal government's stance toward Canadian manufacturing was overwhelmingly characterized by the absence of effective and balanced industrial policy, a lopsided focus on unsustainable commodity exports, an absent monetary policy that made current surges and crashes worse, and an ideologically driven and naive international trade agenda. At its most critical moment, this absence of leadership coincided with the global financial crisis and recession, as Canadian manufacturing experienced steep cuts to capacity, staggering job losses, and declining investment, resulting in a structural shift that has dealt Canada out of far too many next-generation investments.
Despite these damaging actions and consequences, the resiliency of Canadian firms and workers shows that these strategic sectors still retain world-leading advantages here in Canada: enjoying top quality, seeing record levels of productivity, benefiting from a dedicated and highly skilled workforce, and operating with internationally competitive cost structures.
I am sure you have been hearing many voices and many perspectives throughout these hearings. I would like to offer just a few words about the role of the labour movement and the voice of workers in this conversation. Our interest in the success of Canadian manufacturing is, of course, at one level, about our members' jobs and livelihoods, but over many decades we have seen the larger picture and pushed hard to partner with industry, as well as governments, for policies that support innovation, enhance productivity, spur investments, and bring leading-edge technologies to Canada.
At times we hear from some commentators that somehow labour is just a special interest or even that we are a barrier to the success of Canadian manufacturing. I suggest that there is no one more interested or more invested in the success of the manufacturing sector than our members. We are far more invested than stockholders or government policy-makers.
Beyond our paycheques, our members are also proud of the work they do, proud of what they make, proud to contribute their skills, efforts, and knowledge to the success of their employers.
You have in front of you Unifor's formal submission to this committee entitled “Strong policies: the missing ingredient for Canada's manufacturing success”, which lays out a series of specific proposals in several key industries important to Unifor. I will not walk you through all of this in detail at this stage, or with the time I have here this afternoon. I will leave it for you to go over more carefully, and point out that there is a long list of specific, concrete, and actionable proposals. Rather, I'd like to use the short term to raise six broad points for you to think about in terms of manufacturing and the role of government.
First, I would like to emphasize that Canada already has a dynamic and innovative manufacturing sector that is the envy of the world. We are home to nearly every kind of advanced manufacturing, from automotive to aerospace, biotechnology, electronics, public transit, and more.
We have world-leading manufacturing that adds value to our wealth of natural resources in the metals, forestry, food and beverage, and petroleum products industries. We are integrating into a continental market with the world's most valuable economy. We have among the highest-skilled workforce in the world. We are home to dozens upon dozens of operations of leading global firms, and have developed strong clusters of innovation in several sectors. From that standpoint of economic development, what we have already, everybody around the world wants. It is incredibly valuable, which means we need to understand that governments in every other country in the world are busy trying to get it.
My second point is that Canada is missing a huge opportunity and needs to deepen the connection between value-added manufacturing and our wealth of natural resources. Canada is blessed with an abundance of natural resources of every kind: oil, gas, minerals, forests, agriculture, and more. Yet for far too long we have been in the position of a global supplier of raw materials, and not pushed far enough with pursuing much more value-added manufacturing.
Just think about the missed opportunities for every major resource we have. In the metals and mining industry, why are we so content just to dig it up—so much of it—and ship it out as raw ore for others to refine in turn into valuable metals and products? Why are we not world leaders in every aspect of metal production, fabrication, and leading the world in lightweight materials technology? In forestry, it is the same dynamic. We ship our raw logs and unprocessed pulp around the world. Why don't we lead even more as the global supplier of all paper products, wood products, and advanced environmental building materials? Why are we not the world's leader in furniture manufacturing?
In energy, we are too content to focus on exporting unprocessed resources, rather than focusing on refining products here in Canada and supporting stronger petrochemical and plastics industries. Canada needs to prioritize the strategic advantage we have in natural resources to ensure that we add value, and that more of the benefits stay here.
The third point is that the terrain for manufacturing success around the world is increasingly about policy. We have so much potential, but it's not being realized. Around the world we see manufacturing success. We are increasingly seeing strong and sophisticated policies. We see active public partnerships and strategic investments. We see a leadership role for government and labour force development. We see smart and creative leveraging of access to natural resources that is designed to secure long-term economic development. In every other leading manufacturing jurisdiction, we see a strong role for active government to develop and possibly even steer the long-term future. It seems that only in Canada do we cling to some naive belief that the only job of government in relation to manufacturing is to get out of the way. That kind of thinking may have been around for a long time, but not only is it wrong, it has never been true, even in the most supposed free market economies like the United States.
In global rankings of country brands and brand image, Canada always gets top marks. Certainly we have a strong economy and decent living standards for most citizens, and we are known around the world for being nice. That is certainly a good thing, but we are also naive. When it comes to important policy initiatives that deal with global corporations or trading with other countries, we are far too often known to be the boy scouts, believing a bit too much that everyone else is playing nice, and governments elsewhere are also just staying out of the way of industry.
Think for a moment about the role of government in the key economies of the EU. Think about Germany and France. Think about the role of government in Japan and South Korea. Think about all of Scandinavia. Think about government's role in manufacturing in China. Around the world, governments play a vital role in forging a vision, providing long-term direction, engaging with industry, and enacting strong policies. It is time Canada did the same.
My fourth point is that when it comes to manufacturing, governments in Canada at all levels need to get some guts. What do I mean by that? Not only do we need to up our collective game in terms of active policy, but we need to put in place the people with the mandate and resources to really engage with world-leading global manufacturers.
I hear from across the manufacturing sector that our approach is about having an open door, and that we are always ready to listen to potential investors, or that we're good at booths at trade fairs. But that's not enough. In many of the most important manufacturing sectors, those with the most valuable investments to make, with the biggest benefits to our economy, it is really the big leagues....
The key decisions are made around the world in Detroit, New York, Tokyo, Seoul, Frankfurt, New Delhi, Sao Paulo, or Beijing. These companies are looking elsewhere. They are talking to everyone and they're being courted by everyone. What I hear over and over again is that Canada just does not have the capacity to really engage with these global firms. This is no knock against the people we have in place now; they just do not have the right tools or mandate.
Governments in Canada are too afraid to lead and to play with the big players. That is in part why our policies focus so much on small and medium enterprises, and on incubators and hubs, and on university-industry research partnerships. All this is great stuff. Seriously, these are important, but it is easy stuff and it is not enough.
From where I sit, having watched more than 30 years of a political push for a certain kind of globalization so that money and technology can more easily move around the world, I find it ironic that those who really push these ideas are also the ones in Canada who do not want to play on the world stage that they have created. I encourage you not to be afraid to lead, to get some guts and to get out there.
Fifth, just to dispel any myths that may be out there, Unifor is entirely in favour of global trade. More than one-third of our members work in sectors that are dependent on trade.
