Home Month and Year September 2023 Edmonton’s Manufacturing Dynamic

Edmonton’s Manufacturing Dynamic

The underrated key driver of Edmonton’s economy

Drader Manufacturing

When it comes to misleading and inaccurate cliches and stereotypes, the business of manufacturing is often underrated, underestimated and glossed over. Clichés and stereotypes be darned! The facts and figures underscore that manufacturing, particularly in Edmonton, is a vitally important lynchpin of business.

“Manufacturing is one of Canada’s key economic drivers,” explains Alan Arcand, chief economist of Canadian Manufacturers & Exporters (CME), the national organization which represents more than 2,500 Canadian manufacturers of all sizes from coast to coast. “It is the second largest major subsector in Canada, ranking behind only real estate.

“Manufacturing directly generates almost 10 per cent of Canada’s GDP and more than 60 per cent of Canada’s merchandise exports. Including indirect and induced impacts, manufacturing’s footprint amounts to one-quarter of Canada’s total economic activity.”

Arcand also points out that manufacturing directly employs 1.7 million Canadians and supports 3.4 million additional Canadian workers through supply chain activity and employee spending.

Edmonton is certainly not immune to the stereotypes and perceptions about business but clichés are hard to change, or even modify.

While Edmonton continues with the perception of being a major centre for the oil and gas business, manufacturing continues to grow, succeed and be an underrated key driver of the city’s economy. According to Andrew Koning, senior policy and research analyst with the Edmonton Chamber of Commerce, “The Edmonton region is home to 40 per cent of Alberta’s manufacturing production and plays a critical role in Edmonton’s present and future. With over 280 health tech companies in Edmonton and machinery manufacturing making up 15 per cent of Edmonton’s manufacturing business, the strength of Edmonton’s manufacturing sector is a reflection of our region’s skilled and varied workforce.”

A solid example is Gambit Machining and its globally respected, 62-year reputation for machining precision.

“We like to say that anyone can make a great part once,” beams Tracy Albert, Gambit’s owner and manager. “As experts in precision, we can do it a million times. Right here in Edmonton with our experienced staff, quality control processes, machining technology and our continuous improvement, Gambit can create practically anything you can imagine – and even some things you can’t!”

Another dynamic example is Drader Manufacturing, who provides large and small companies in a range of industries across Canada and the U.S. with custom or ready-made plastic parts and molds, including milk crates, bread trays, bakery baskets, warehouse bins and much more.

A recent and important component of this company’s respected manufacturing reputation is the patented Drader Injectiweld, the hand-held plastic welding fabrication kit and repair system known worldwide for its ease of use and strong welds.

“Manufacturing is vital to the Canadian economy and in addition to the products and services, manufacturing provides employment, skills and innovation,” emphasizes Kevin McTavish, Drader’s vice president of manufacturing.

“Relying on overseas supply chains can prove to be unreliable, costly and inefficient. This industry is also very important for Edmonton. As the number of people moving into our region continues to rise, it is crucial for providing the jobs and products necessary for Edmonton’s growing and expanding population.”

The stats and the trends underscore the growing importance of manufacturing, not only for the economy but also for employment and overall quality of life.

Arcand cites CME figures which show that last year, 51,500 people were employed in Edmonton’s manufacturing sector, accounting for nearly 7 per cent of total employment.

“In 2022, manufacturing sales in Alberta hit a record high of $108.5 billion, thanks mainly to higher prices, especially for refined petroleum products. In Calgary and Edmonton, factory sales came in at $14.4 billion and $54.9 billion, respectively, in 2022. These were also record highs.”

He also acknowledges that technology is not only dramatically impacting the manufacturing sector, it is a transformation. One of the common terms used to describe this transformation is “Industry 4.0,” referring to having entered the fourth industrial revolution. This revolution is being powered by the internet and web-enabled software applications capable of processing a large amount of data, transforming the factory floor with interconnected systems that communicate, collect, analyze and exchange data.

“Relentless competitive pressures are driving manufacturers to adopt technology to lower operating costs, increase flexibility and responsiveness, reduce waste and improve product quality,” he says.

“Machine learning, robotics and AI have advanced at a rate unseen before,” Albert points out. “It makes for a very exciting time for manufacturing, particularly for Gambit. We are continually exploring and experimenting with technology to improve our operations, quality, efficiency and manufacturing capabilities.”

McTavish enthusiastically adds that, “Drader has adopted digital information for data collection and automating information gathering and reporting. Automation continues to help our production employees work more efficiently and improve ergonomics.”

Despite the solid growth and potential, there are advantages and challenges for the sector.

“Our skilled workforce is world class,” Albert says. “Favourable foreign exchange for international customers makes Canada extremely competitive internationally and Canada has an impeccable international reputation for human rights, health and safety and stability. But there are challenges, like the shrinking skilled workforce due to the demographic shift to retirement. I have been actively involved in various Alberta and Edmonton initiatives, advocating for and promoting skilled trades to youth.”

It’s the same urgent warning from McTavish.

“Our biggest challenge is finding qualified people to work in our manufacturing jobs across Canada and in Edmonton.”

Arcand emphasizes the urgency and recent slump in manufacturing’s scramble for skilled labour. “Although labour and skills shortages have been a problem in manufacturing for some time, it has recently gotten much worse. In 2021 and 2022, more than 80 per cent of Canadian manufacturers said they faced immediate labour and skills shortages, up sharply from 60 per cent in 2020 and only 39 per cent in 2016.”

CME stats show the top three skilled occupations most in manufacturing demand are welders, millwrights and machinists.

“Basically, manufacturing has four urgent and key challenges,” he says. “Labour and skills shortages, weak R&D spending, sluggish investment and slow technology adoption, weak domestic production and export growth and decarbonisation.”

Despite some sector speedbumps, Koning says Edmonton manufacturing is dynamic and offers several advantages for manufacturers.

“Our region is the key transportation and supply chain hub for the manufacturing sector in Western Canada. It is on the important CANAMEX trade corridor, providing a valuable access point to the north. Also, Edmonton is Canada’s closest major airport to Asia by circumpolar routes.”

McTavish’s positivity reflects the spirit of the manufacturing sector.

“Manufacturing has a positive outlook for 2024, with more supply chains looking to re-shore manufacturing to North America to help alleviate challenges from overseas suppliers. Canada has a strong manufacturing background and we need to continue to hire and train new Canadians to fill some of the open manufacturing positions across the country.”