Thank you very much.
My organization, the CCMBC, represents the interests of small and medium-sized manufacturers and businesses in other sectors, but the preponderance of them are in the manufacturing sector.
The Canadian manufacturing sector has been shrinking for some time. Since 2018, manufacturing as a percentage of GDP has decreased by 5%, while the comparable U.S. number increased by 10%, which is clearly a major difference that hasn't been seen before. This is important, because the manufacturing sector in any country is a key source of innovation, productivity and well-paid employment.
The manufacturing sector and the energy sector are closely linked, especially in Canada. Many manufacturing companies in eastern Canada are heavily dependent on the oil and gas sector for their success. Too many Canadians believe that if punitive policies are imposed on the oil and gas sector, it's Alberta's and Saskatchewan's problem, when in reality it significantly affects the welfare of the entire country.
Manufacturing used to represent about 20% of Canada's GDP, whereas it now sits around 10%. There are a lot of different reasons for that: growth of the service sector, technological change and different laws, regulations and so on in different countries.
The admission of China into the World Trade Organization in 2001 is often viewed in hindsight as a huge mistake, as much manufacturing in western countries went to lower-cost China, which does not observe the same environmental, human rights, wage and other policies of western nations. China also abuses intellectual property rights, dumps goods into Canada at unreasonably low prices, does not abide by WTO trade rules and interferes in elections and other elements of other countries, including Canada. Our government's recent move to bring us closer to China is a mistake for our manufacturing sector and our economy in general, not to mention our sovereignty.
Much of the decline in manufacturing in Ontario and other provinces can be linked to the so-called green policies that drastically increase the cost of electricity. Manufacturers are big consumers of electricity and were made much more uncompetitive by these foolish policies.
The industrial carbon tax and methane regulations that Ms. Baiton referred to will fall heavily on the manufacturing sector and the energy sector, the two most productive sectors of the Canadian economy. We know that Canada has a serious productivity problem, so to impose such an onerous regime—regulatory and tax—on the two sectors that contribute most to productivity, which is a proxy for our standard of living, is ridiculous. Once again, our businesses are being asked to compete with one hand tied behind their backs, as their foreign competitors don't face similar taxes and regulations.
Increasing energy exports will boost manufacturing, as the sectors are so closely linked. Building pipelines and other infrastructure to enable increasing exports can and should be done in Canada. Unfortunately, some recent energy projects have actually helped foreign manufacturers much more than our own. The Kitimat LNG facility, for example, used modules from China in its first phase and is slated to use modules from Korea in its second phase. Many of our manufacturing members have said they would be capable of providing infrastructure for these projects but were never given the opportunity.
Boosting oil and gas exports would also bring well-paid employment to Canada and more revenues for governments and would boost our flagging economy, which appears now to be in recession. Neglecting our most important individual industrial sector—oil and gas—for the last decade is the key reason for our weak economic performance today. A weak economy makes us much more vulnerable to the punitive policies of other countries, such as the U.S. and China, among others. Additional government revenues from more energy exports should be used to pay down our massive public debt and implement policies to lower taxes and the onerous regulatory burden that is making all of our Canadian businesses less competitive.
I want to make a few comments on Bill C-5, which permits the government to selectively override various pieces of legislation. What this bill concedes is that these laws are bad, or they wouldn't have to be overridden to get anything done. Why not get rid of the bad laws completely? The fact that they sit on the books further discourages foreign and domestic investment, which has been fleeing Canada for years. Bill C-5 also facilitates winner-picking by government, which has never been a workable strategy. Just look at the billions of tax dollars that have been wasted on the EV battery sector at a time when Canada has no money to waste.
Finally, the business community wants a trade deal with the U.S. as soon as possible. Implying that Canada can significantly replace U.S. trade with that of other countries is pure fiction. We should always be seeking to diversify our trading relationships, but pretending we'll be able to replace the U.S. as our largest trading partner by far is just lying to Canadians for partisan political gain to whip up Canadians' dislike of President Trump. Meanwhile, Canadian businesses and workers suffer, losing jobs, going out of business or moving out of Canada.
Uncompetitive conditions in the Canadian economy drove many manufacturers out of Canada long before Trump came along. Once a country loses its manufacturing sector, it doesn't come back for a very long time, if ever.
Thank you.