MANUFACTURERS WANT MEASURES TO BOOST INNOVATION AND INVESTMENT AND STRENGTHEN SUPPLY CHAINS

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OTTAWA (ON), April 7, 2022 /CNW/ –

The budget does not solve labor shortages
Canadian Manufacturers and Exporters (CME) welcomes the initiatives announced in Budget 2022 to drive innovation and investment and to ensure more efficient and resilient supply chains. However, the Workforce the market measures announced today are not sufficient, given the scale Workforce shortage facing from Canada manufacturing sector.

“The manufacturing sector today faces two major challenges that impede its ability to produce and sell products: supply chain disruptions and labor shortages,” said Denis Darby, President and CEO of CME. “Today’s budget offers important and helpful measures to spur innovation and implement and promote long-term economic growth and alleviate supply chain issues, but it fails to address the labor shortages. It’s a fail.

The budget was presented today by the Deputy Prime Minister and Minister of Finance, the Honorable Chrystia Freeland.

Innovation: the key to strengthening from Canada competitiveness
CME was pleased to see several measures designed to improve from Canada innovation and investment performance, including the creation of a Canada Innovation and Investment Agency designed to help businesses make the investments needed to innovate and grow. However, its mandate will need to be clear, nimble and aligned with industry needs if the agency is to fulfill its mandate of improving investment growth in the manufacturing sector.

“Globally, Canada lags far behind other OECD countries in terms of non-residential business investment, which is deteriorating our international competitiveness. Make sure from Canada future prosperity, we must reverse these trends. But to do this, Canada must have the right levers to stimulate investment,” adds Darby.

The government’s plan to reduce taxes for small businesses is a positive step. It will relax the current phase-out rules related to the small business tax rate, with access to the lower rate being eliminated entirely when taxable capital reaches $50 millionrather than $15 million.

Also noteworthy is the creation of a Canada Growth Fund aimed at attracting private sector investment in new and traditional sectors, including manufacturing, as well as supporting the restructuring of critical supply chains.

A 30% tax credit for investments in clean technologies and a refundable tax credit for carbon capture, use and storage (CCUS) will support manufacturers in their efforts to decarbonize their industrial processes. However, care must be taken to provide companies with the necessary technical support.

MEC is also pleased to see that the federal government has committed to undertaking a review of the Scientific Research and Experimental Development (SR&ED) program as well as examining the appropriateness of adopting a patent box regime, two initiatives championed for a long time by MEC. Since the manufacturing sector accounts for a significant portion of from Canada R&D expenditure, it is essential that industry is adequately consulted on any proposed changes to the SRE&ED program and the potential development of a patent box.

Strengthening supply chains
Supply chain disruptions have had a significant impact on Canadian manufacturers, resulting in lost sales of more than $10.5 billionaccording to a recent CME survey.

Ninety percent of Canadian manufacturers say they experience supply chain disruptions that affect their ability to produce and sell products. Among this group, more than 60% rate these disruptions as major or severe. Businesses struggle to find the components and products they need to fulfill orders and make sales. Strong policies are needed to help ease supply chains strained by the pandemic and prevent future disruptions.

“The measures announced in today’s budget are appreciated, but we need to be able to roll them out quickly so our businesses see immediate improvement,” Darby said.

Specifically, new measures announced today, such as the National Corridors Fund to facilitate the movement of goods, the development of industry-led solutions to make supply chains more resilient, and the elimination of bureaucracy to make supply chains more competitive could prove useful. .

Working population: need to reduce immigration processing times
Unfortunately, the government’s budget did not propose any substantial measures to address the acute and persistent labor shortage in the manufacturing sector, even though the sector is currently facing a record 81,000 job vacancies.

MEC welcomed changes to the Temporary Foreign Worker Program announced earlier this week, but more solutions were expected in today’s budget. Although the budget recalls the investments made to support the processing of immigration applications, processing times remain too long.

“MEC will continue to work with the federal government on our shared goal of creating a more competitive, greener, innovative, inclusive and resilient manufacturing sector. Budget 2022 is a step in the right direction, but there is still work to be done,” Darby concluded.

FAST FACTS

  • The manufacturing sector accounts for more than 10% of from Canada gross domestic product.

  • Manufacturers directly support more than 1.7 million jobs in Canada.

  • Total manufacturing sales in 2019 exceeded $685 billion.

SOURCE Canadian Manufacturers and Exporters

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