The Liberal take on Canadian manufacturing

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by Mary Scianna

The Liberal Party won a clear majority in the election, taking 54 per cent of the seats in the House of Commons.

What is not so clear is what a Liberal government will mean for Canadian manufacturing.

The Liberal Party made close to $1 billion in promises to support manufacturing and skilled trades education and training, and more than $60 billion in infrastructure spending, but will these initiatives, if implemented, help manufacturers in Canada?

The Liberal government has said it will run three years of deficits to help pay for its promises, that the party won’t exceed $10 billion and will balance the books in 2019. If the government stays within that $10 billion limit, it may be able to balance the books, but it could run much higher. High and long-running deficits don’t encourage direct foreign investment, an important economic contributor.

Here’s a rundown on some promises that may help boost manufacturing.

• Reinstate a labour-sponsored funds tax credit. The government has stated it believes the 15 per cent federal non-refundable tax credit on up to $5,000 per year for investments will help SMEs get their start and spur job creation. It would be more helpful if the monetary threshold was set at a much higher level.

• Reduce employment insurance premiums. The government plans to provide a 12-month break on EI premiums for hiring youth between the ages of 18 and 24, and it plans to cut EI premiums to $1.65 per $100 earned from the current rate of $1.88. A good idea, but first you have to find youth that are skilled or have the willingness to learn and to work in the manufacturing sector. One way is to encourage and support more programs like the Canadian Tooling and Machining Association’s Introductory Trades Training Program.

• Invest in pre-apprenticeship training programs. The government says it will work with provinces, territories and post-secondary institutions to develop or expand pre-apprenticeship training programs, providing up to $10 million per year to help young Canadians gains skills for high demand trades. The government will have to ensure some funding is channeled to specific manufacturing programs for machinists and welders, where money could be used to invest in new equipment, so students could learn about current technologies.

• $775 million per year for jobs and skills training. Part of that funding will include $50 million to renew and expand funding to the Aboriginal Skills and Employment Training Strategy and another $25 million each year for training facilities, delivered in partnership with labour unions. The government will have to ensure once people are trained, they’re able to relocate to where jobs are, or find jobs where they live.

Investments in jobs and skilled trades training hinge on having a strong economy in which jobs are plentiful and companies are actively investing in domestic expansion of their businesses.

The new Liberal government has a challenge and an opportunity to help turn the Canadian economy around.

Let’s hope it fulfills its promises to fuel growth and prosperity. SMT

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