Budget fails to address labour shortages: CME

The initiatives announced in the budget to stimulate innovation and investment and to ensure more efficient and resilient supply chains are positive.
However, the labour market measures announced in the federal budget are not sufficient, given the magnitude of the labour shortage confronting Canada’s manufacturing sector, states a press release from the Canadian Manufacturers & Exporters (CME).
“The manufacturing sector faces two major challenges today that are hindering its ability to produce and sell products: supply chain disruptions and labour shortages. Today’s budget offers important and helpful measures to stimulate innovation and implement and promote long term economic growth and ease supply chain issues, but it fails to address labour shortages. This is a miss,” reads the statement.
Innovation: the key to bolstering Canada’s competitiveness
There were several encouraging measures, including the creation of a Canadian Innovation and Investment Agency designed to help businesses make the investments needed to innovate and grow in the budget, states the CME, “However, its mandate will need to be clear, agile and align with industry needs if the agency is to deliver on its mandate of improving investment growth in manufacturing.”
Of note in the budget is the establishment of a Canada Growth Fund aimed at attracting private sector investment in new and traditional sectors, including manufacturing, as well as to support the restructuring of critical supply chains.
Also, a 30 per cent tax credit for investments in clean technology and a refundable tax credit for Carbon Capture, Utilization, and Storage (CCUS) will support manufacturers as they work to decarbonize their industrial processes.
“However, care must be taken to provide businesses with the necessary technical support,” states the CME.
Strengthening supply chains & exports
Supply chain disruptions have had a significant impact on Canadian manufacturers, resulting in sales losses of more than $10.5 billion, according to a recent CME survey.
Ninety per cent of Canadian manufacturers say they are experiencing supply chain disruptions that are affecting their ability to produce and sell products. Of this group, over 60 per cent rate these disruptions as major or severe.
“Companies are struggling to find the components and products they need to fulfill orders and make sales,” states the CME. “Strong policies are needed to help ease pandemic-strained supply chains and to prevent future disruptions.”
Noteworthy is also $4.7 million over five years to create a Trade Remedy Counselling Unit that will assist companies, with a focus on small and medium-sized enterprises.
Labour force: need to reduce processing times in immigration
Unfortunately, the government’s budget did not offer any substantial measures to address ongoing and acute labours shortage in manufacturing, even though the sector is currently facing a record-high 81,000 job vacancies.
“While the budget recalls investments made to support the processing of immigration applications, processing times remain too long,” concludes the CME.