Home Month and Year January 2022 Our Wishes For 2022: Strong Local Supply Chains and People

Our Wishes For 2022: Strong Local Supply Chains and People

David McLean

Let’s begin with the good news, shall we? Alberta’s business community ended 2021 on a high note.

Rising oil prices resulted in the rosiest drilling forecasts we’ve seen in years. More drilling means more trucks on road, increased demand for manufactured goods, and more money circulating in the economy.

It also means more money in government coffers. The province’s fall fiscal update forecasts a $5.8 billion deficit. While daunting, this is remarkably better than the $18.2 billion deficit forecast in spring.

Dow Chemical announced a new, net-zero petrochemical facility near Fort Saskatchewan that’s rumoured to amount to a $10 billion investment. Northern Petrochemical Corporation announced a $2.5 billion ammonia and methanol production facility for Grande Prairie. Amazon announced a $4.3 billion cloud computing hub for Calgary.

It’s been way too long since we saw investment announcements of such magnitude.

While there’s a spring in the step of Alberta manufacturers, there remains significant challenges. Survey results released by Canadian Manufacturers & Exporters (CME) shows manufacturers are facing severe labour shortages, ongoing supply chain disruptions and rising input costs. Combined, these challenges will hamper the sector’s recovery in 2022.

Here are some of the survey highlights:

  • 77 per cent of respondents say attracting and retaining a quality workforce is their biggest challenge.
  • 70 per cent of businesses say they are having the most trouble filling general labour and assembly positions. Shortages in the skilled trades are also growing, particularly for millwrights, welders and machinists.
  • Labour and skills shortages are so severe today that 1 in 5 manufacturers are considering moving some or all their production outside Canada.
  • 88 per cent of respondents said that their suppliers’ delivery times were slower compared with the situation one year ago.

Manufacturers need solutions. Governments must do more to promote skilled trades and manufacturing careers, provide more financial support for investment in automation, but most of all, increase the intake of economic class immigrants.

We need the federal government to step up and set bold economic class immigration targets. We should aim for 500,000 economic class immigrants per year as of 2030, which is more than double of our current intake of this specific immigration class. We should also streamline the temporary foreign worker program so that it can act as a release valve on labour shortages in the short term. Bottom line, we need a lot more people coming into Canada in order to grow.

Lastly, the historic supply chain disruptions of 2021 teach a valuable lesson: our reliance on global supply chains is a big risk. When you boil it down, we’re left with one solution – making more things right here in North America. Let’s hope in 2022 that governments and businesses alike start strategically developing local suppliers – even if it means going outside their comfort zones.

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.