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Survey Says: Labour Shortages and Competitiveness are the Top Manufacturers’ Challenges

David MacLean

CME’s biannual Management Issues Survey (MIS) shows that Canadian manufacturers are struggling to find workers with the right skills and are deeply concerned about Canada’s eroding competitiveness.

MIS results show that a full 69 per cent of respondents face immediate labour and/or skills shortages, and three quarters expect shortages within the next five years. In both cases, shortages are most acute in skilled production fields. Manufacturers identify a lack of students choosing careers in manufacturing-related fields and skillsets of workers not keeping up with new technologies as the reasons behind the shortages.

Additionally, more than half of the respondents felt that the federal government is not investing enough to help grow and build a strong manufacturing sector in Canada. Manufacturers are calling for a more competitive business tax regime and for enhanced supports for investing in machinery, equipment and technologies.

The 2018 MIS received 540 responses representing all regions of Canada. Many survey respondents – about 30 per cent of the total – run companies with facilities in more than one province. The MIS provides valuable insight into the mindset and concerns of manufacturers – both in terms of their day-to-day struggles as well as their longer-term strategic goals.

Because MIS was in the field through the summer and into the early fall, a third major was theme was clear in the survey results: businesses were deeply concerned about Canada-US trade uncertainty and the outcome of NAFTA renegotiations. With the new USMCA deal signed – and provided it comes into effect – Canadian manufacturers and policy-makers can scratch one item off their to-do list. With that done, attention must turn to addressing the other issues identified in this survey, beginning with labour and skills shortages, and improving the business tax environment.

Labour shortages are a tough nut to crack for manufacturers and policy makers as it takes a long time to turn the ship around. First off, manufacturers need to improve their own image with young Canadians. Modern manufacturing is clean, dynamic and high-tech. It’s on us as business leaders to make sure young people know that. We also need to do more to attract under-represented groups like women and Aboriginals. That’s why Canadian Manufacturers & Exporters has launched our Women in Manufacturing initiative that includes $4,000 scholarships for young women pursuing careers in trades.

On competitiveness, Alberta manufacturers need some relief. CME is calling on federal and provincial governments to immediately lower combined tax rates to below 20 per cent, if only to keep pace with US tax reforms. The Trudeau government should also match the accelerated capital cost allowance provisions currently in place in the US, giving businesses an immediate 100 per cent tax write-off on qualifying capital asset purchases. The Alberta government should follow suit.

The 2018 MIS flags some areas of concern for the manufacturing sector. Policy makers and manufacturers alike have work to do to address them.

Canadian Manufacturers & Exporters (CME) is the voice of Canadian manufacturing. CME represents more than 2,500 companies who account for an estimated 82 per cent of manufacturing output and 90 per cent of Canada’s exports.