OTTAWA, ON, Nov. 3, 2022 /CNW/ – The Fall Economic Statement released today by Deputy Prime Minister Chrystia Freeland acknowledges many key challenges facing Canada’s manufacturers, including labour shortages and investment incentive gaps caused by the US’ Inflation Reduction Act, but falls short on taking bold action to address them.
“This is a good first step, but Canadian businesses, and manufacturers in particular, cannot afford to wait years for government to address these major competitiveness problems. Other countries are pouring billions into their industrial sectors and are finding and training the workers needed to fill the jobs of the future. If Canada does not follow suit, we will lose out on manufacturing investment and the good jobs that come with it,” said Dennis Darby, President and CEO of CME.
Manufacturers are featured prominently in the FES and the government’s plans for future economic growth. CME is happy to see the government commit to investing in Canada’s advanced manufacturing competitiveness. Manufacturers look forward to discussing these issues with government directly.
A new Investment Tax Credit for Clean Technologies equal to up to 30 per cent of the capital cost of an investment in low emission vehicles, low carbon heating equipment, and green energy generation will help industry in their net zero transition. Furthermore, investment tax credits for clean hydrogen of up to 40 per cent is moving forward and is good news for industry.
The Canada Growth Fund, a key initiative announced in Budget 2022 received more definition in the FES, however, manufacturers will need details and are eager for this program to get off the ground.
Labour and Skills Shortages:
On the labour and skills shortage front, industry was happy to see $250M announced for skills development through the new Sustainable Jobs Training Center and other ESDC initiatives. Moreover, $1.6B for processing and settlement of new immigrants including $50M in 2022-2023 to reduce immigration processing backlogs is welcomed and a direct ask of CME. Finally, $800M for youth job training and young Canadians will help manufacturers hire more students and co-op students and is part of CME’s request to promote our industry to youth and underrepresented groups.
The new 2 per cent tax of share buybacks. Canadian businesses do not need a new tax at this time and this proposed rate is double the US rate and will put Canadian firms at a tax disadvantage. Details of this new measure are still forthcoming, but this will not be welcomed news in industry.
“CME sees a lot in the FES that we can build on, but the clock is ticking, particularly on matching the manufacturing investment incentives found in the US Inflation Reduction Act. We will continue to expect, and push, for strong and decisive action to address all our challenges,” concluded Darby.
CME had detailed these and other needed measures in its 2023 pre-budget submission.
- The manufacturing sector accounts for nearly 10 per cent of Canada’s real gross domestic product.
- Manufacturers employ 1.7 million people in Canada.
- Total manufacturing sales hit a record high of $718.4 billion in 2021.
SOURCE Canadian Manufacturers & Exporters