As someone who grew up in a General Motors household in a part of Ontario known for automobile assembly and the parts industry, I want to highlight the optimism that I have for manufacturing in southern Ontario despite the challenges that have faced this sector in recent years. While there remain challenges in southern Ontario for manufacturers – with uncertainty surrounding hydro rates being the most common concern I hear – it is also important to note some interesting prospects for growth, particularly when Canada is signing a record amount of trade agreements with countries around the world.
A recent report from consulting firm KPMG stated that the strong economy is lifting the manufacturing sector with some record months already this year. Based on a report on a survey of 154 senior industry executives, they found that only 14 per cent of manufacturers planned to source from China, down from 31 per cent in a 2013 survey. Companies are now making efforts to source inputs from North America. The strengthened U.S. economy and weaker loonie is also working in favour of Canadian factories, whose sector experienced a strong month in May as sales rose by 1.6 per cent over April. It was the fourth time in five months sales improved. (Manufacturing Rebound Seen (2014, July 22). Retrieved from http://www.brandonsun.com/breaking-news/manufacturing-rebound-seen-268055731.html?thx=y)
Last week I travelled across southern Ontario in my role as the Parliamentary Secretary to the Minister of International Trade. Last September, the Prime Minister appointed me to assist the Trade Minister with the roll out of new trade agreements and to work closely with small to medium-sized enterprises (SMEs) across Canada. As we open up amazing new opportunities for Canadian companies – from the 500 million consumers in Europe with our European Union trade deal to the first free trade agreement we have signed in Asia with South Korea – our government wants to ensure that small to medium-sized businesses take advantage of these opportunities. I met with employers, chambers of commerce, universities and colleges last week to talk about trade, jobs, education and the training of skilled trades in Ontario. Small to medium-sized employers have been critical to our success in recent years and have helped Canada weather the international economic challenges better than any of our allies in the G-7.
Two companies stood out to me during this tour as both the realization of the “Canadian Dream” (a quote used by one of them) and a sign of great potential for Ontario going forward. Future Steel Buildings in Brampton was started by two Italian immigrants almost 30 years ago. The two brothers saw the potential for manufacturing arched steel buildings in Ontario for sale to farms, military and wider industrial uses. The versatility, durability and the competitive price of the buildings led to some tremendous success. Today, this family business employs 60 people in specialized steel manufacturing in Ontario. They sell their buildings in over 100 countries. They also source their steel and major components in Canada. Their future is bright and new free trade markets will make them even more globally competitive.
Another impressive specialized manufacturing operation was in the pharmaceutical industry. Dalton Pharmaceutical grew out of a small innovation lab at York University that was focused on growing small businesses. Dalton is focused on contract manufacturing for the pharmaceutical industry with the specialized testing and quality assurance that comes with this industry. Dalton was started in the late 1980s by the son of immigrants who was a recent university graduate. Fast forward a few decades and Dalton now employs 90 people at their high-tech laboratories in the GTA and have customers around the world. They are investing in their people and expanding their facilities, spending millions of dollars with local suppliers across Ontario.
Manufacturing is not dying in Ontario, but it is evolving. We will still have world class large manufacturing facilities – like General Motors in Oshawa – and we should continue to assist these employers in remaining competitive and innovative wherever possible. Increasingly however, our growth in manufacturing in Ontario will not come from one or two massive employers, but from dozens of smaller, specialized manufacturers who sell their goods around the world. Successful manufacturers will need to compete in Canada and around the world and increasingly this will come from specialized or operations that compete on quality and innovation more than simply volume and price. What I found most compelling about the founders of Future Steel Buildings and Dalton Pharmaceuticals was the immense pride they had in their personal story. They used the tremendous opportunity of their new country of Canada and coupled this opportunity with hard work, ingenuity and the willingness to take calculated risks. They also looked abroad very quickly as small businesses because they knew that Canada was a terrific place to start a business, but not enough as a single market to allow them to grow and succeed. A Future Steel Buildings founder described it as the Canadian Dream, which is not an exaggeration. Governments need to foster such a culture and provide innovators and risk-takers with the encouragement and tools to turn more dreams into reality.
