CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

LATEST MAGAZINE

CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

Federal budget nets mixed reaction from Canadian manufacturing community

Share This Post
Canadian Manufacturers & Exporters believes the federal budget provided good first steps in strengthening manufacturing while the Canadian Chamber of Commerce said there were missed opportunities to drive growth. PHOTO by Pexels.

The federal budget has drawn mixed reviews from the business organizations representing Canadian manufacturers.

Canadian Manufacturers & Exporters (CME) is mainly supportive of the steps the Liberal government is taking through the budget to respond to the U.S. Inflation Reduction Act, drive the country’s transition to net zero emissions, improve labour shortages, and alleviate supply chain disruptions.

CME said the budget answered these calls by proposing the following measures:

  • Clean Technology Manufacturing Investment Tax Credit matches similar manufacturing credits found in the IRA and addresses some concerns about potential lost investment in Canada.
  • Clean Electricity Investment Tax Credit will help Canadian manufacturer’s transition to net-zero production.
  • Expanded scope of the Tax Credit for Carbon Capture will help us compete with the IRA.
  • Funding to improve immigration backlogs, extended support for Work-Sharing, and funding to increase work integrated learning spaces were all CME asks to improve labour shortages.
  • A new Transportation Supply Chain Office to help industry with disruptions to supply chain transportation networks.
  • A commitment to review the SR&ED incentive system is long overdue and welcome news by manufacturers.

“We were pleased to see the budget respond to our biggest challenges and believe that the investments made today into Canada’s industrial capacity are good first steps in strengthening our sector,” said Dennis Darby, President and CEO of CME. “Manufacturing has always been a cornerstone of the Canadian economy, generating 10 per cent of Canada’s GDP, more than 60 per cent of our merchandise exports, and directly employing 1.7 million Canadians and supporting 3.4 million more workers through supply chain activity and employee spending. With the commitments made in Budget 2023, we have the building blocks to help manufacturing drive Canadian prosperity for years to come.”

Finance Minister Chrystia Freeland called the move towards a net zero economy the most significant economic transformation since the Industrial Revolution, and cautioned that Canada must not fall behind its trade partners as they invest heavily in clean technologies.

“Today, and in the years to come, Canada must either meet this historic moment — this remarkable opportunity before us — or we will be left behind as the world’s democracies build the clean economy of the 21st century.”

This is Freeland’s third budget as finance minister offers and with it the Liberals are continuing to press ahead in shaping Canada’s net zero emissions industrial future. The $16.4 billion in tax credits for clean tech manufacturing, clean electricity and hydrogen over the next five years is an addition to the $6.7 billion in supports for clean tech investment announced last fall. Freeland is also planning to add $500 million to the $4.1 billion in support already promised last year for carbon capture, utilization and storage.

The Liberal government has also committed billions towards some funds, including $15 billion for the Canada Growth Fund, $8 billion for a “net zero accelerator” and $20 billion through the Canada Infrastructure Bank.

The Canadian Chamber of Commerce, however, wasn’t as generous in its appraisal of the budget’s effectiveness.

“Today was an opportunity to lay out a clear plan for growth. While there are some positives, we still lack a coordinated strategy to generate that economic growth over the long term,” said Perrin Beatty, President and CEO of the Canadian Chamber of Commerce. “Businesses across the country are feeling the impact of anemic growth coupled with labour shortages and rising costs for doing business. For future generations to enjoy the opportunities and prosperity we have been so fortunate to inherit, we must unleash the potential of private industry by building a 21st Century workforce, investing in trade-enabling infrastructure and fixing our broken regulatory system.”

Beatty claimed that in the aftermath of the pandemic, international competitors are outpacing Canada as it experiences low growth.

“Achieving competitive levels of economic growth, a clean climate, and equal opportunity for all Canadians aren’t mutually exclusive, but mutually dependent,” Beatty said. “To achieve these goals we need government to eliminate the disincentives that drive away investment and focus on pro-business policies for the benefit of all Canadians.”

The Canadian Chamber of Commerce was pleased with the number of new measures introduced in the budget to help domestic clean technology players remain competitive in the face of the U.S. Inflation Reduction Act but said significant details were missing from the federal budget, including the scope of some of the tax credits and when the Canada Growth Fund would begin disbursing funds.

The Canadian Chamber of Commerce was supportive of the federal government’s willingness to work with business to establish a National Supply Chain Strategy but complained that this was also “a missed opportunity for the government to introduce measures to encourage private sector investment by fixing a broken regulatory system and stepping up efforts to get the provinces to eliminate barriers to interprovincial trade.”

The organization, which represents more than 200,000 businesses in Canada, also wanted to see a sharper focus in the federal budget on the talent shortage considering there are more than 800,000 job vacancies in Canada at this time.

“Our country cannot borrow its way to prosperity,” Beatty said “Canada needs policies, strategic investments and federal leadership that will spur economic growth. Canada’s businesses are anxious to do their part, but the federal government needs to see them as partners, not problems, in building a more successful Canada.”

Share This Post


Recent Articles



WordPress Ads
Wordpress Social Share Plugin powered by Ultimatelysocial
error

Enjoy this post? Share with your network