Challenges Facing the Ontario Manufacturing Sector
In a recent publication by Canadian Manufacturers and Exporters (CME) entitled “Manufacturing Matters in Ontario” the group has identified several issues that hinder growth potential and overall success of manufacturers. As the country’s largest manufacturing province, accounting for 47% of total manufacturing activity in Canada, addressing these issues is essential to having a thriving Ontario economy which supports nearly 800,000 Ontario manufacturing employees who live and work here. This article will explore some of the top issues facing manufacturers in Ontario and will identify potential solutions to enhance the manufacturing capabilities of the province.
Perceived Issues and Challenges from Ontario Manufacturers
Ontario manufacturers have many advantages including a close proximity to the United States market, a large domestic market and labour pool, and abundance of high-quality educational institutions, however challenges still exist. Manufacturers have identified these key issues which prevent them from maximizing their business and investment potential:
Perceived Lack of Government Funding Support
In a survey administered to members of CME, the results show clearly that manufacturers do not believe they are being supported and incentivized by the different levels of government. 46% of respondents believe that the federal government has not been supporting investment and company growth, and worse still, 60% of respondents believe that the provincial government is not doing enough.
The truth is that extensive government support already exists and many manufacturers don’t know where to look for it. Canadian government grants provide a funding pool where manufacturers are able to access millions of dollars for most investment projects. Manufacturers may apply for Canadian government funding for research and development initiatives, hiring and training, technology adoption, and expansion projects. In fact, when leveraged effectively, government funding can help to fix some of the other challenges experienced by manufacturers, such as the ones below.
Lack of Investment and Innovation Support
Process improvement is constantly in the minds of Ontario manufacturing executives. Enhancements to productivity improve profit margins and enable greater capacity for product lines. Generally this is done through enhancing the machinery and equipment that a manufacturer uses, and more modern equipment will allow manufacturers to become highly competitive. Unfortunately, many manufacturers feel that there is little support for process improvement and capacity building initiatives, and therefore fall behind in these areas.
CME has taken this feedback and developed an investment program for businesses seeking technology adoption as a means to improve their capabilities. Funded through FedDev Ontario, CME SMART Advanced Technologies for Global Growth provides two streams of investment assistance. The program’s Assessment Stream enables Ontario manufacturers to recover 50% of the costs (up to $15,000) to assess the current state of their operations and identify a vision and strategy for improvements. Likewise, businesses who have made assessments may apply for the Project Implementation Stream where they can receive 35% of project and equipment costs (up to $100,000). Businesses can receive up to $100,000 in grants through both streams combined. Through CME SMART and other programs for technology adoption, manufacturers will be able to enhance their productivity and innovation capabilities.
Skilled Labour Shortages
The decline of skilled manufacturing labourers has led to a variety of other problems within the sector. Over 40% of manufacturers in the province believe this to be a pressing issue because production costs increase while competitiveness decreases. It can be difficult to plan the future of a business when there is so much variability in production costs while also being unsure of production output. To provide a solution for this growing problem, the Canadian federal and Ontario provincial governments have begun to push for more young people to explore a career in skilled trades while also providing solutions for businesses who seek to hire and train workers. By hiring and training workers efficiently, manufacturers can ensure that they maintain steady output and reduce overall variability within the business.
FedDev Ontario offers an Ontario government grant for training. This funding is reserved for the training of employees to support the adoption of new equipment, software, or processes that will help improve the manufacturing business’ export competitiveness. A common training outcome is productivity improvements in their production and training typically has a direct impact on the manufacturing component of the business; corporate training is ineligible if it doesn’t have an impact on production. Up to 50% of eligible costs, to a maximum of $50,000 will be granted for training projects that consist of one more training themes and can prove the impact on the business’ export expansion goals.
Resources for Ontario Manufacturing Businesses
In addition to small business grants, there are a wealth of resources available to manufacturers which will enable them to overcome some of the difficulties faced in today’s economic and competitive landscapes. Those manufacturers looking to hire skilled labour may use Mentor Works’ Wage Subsidy Identifier tool to discover how to hire the right employees without as significant of a financial commitment. Manufacturers may also wish to attend a free informative webinar where we compare different government funding types and help you identify projects in your business that are eligible to receive funding. Also, feel free to contact us any time with questions about how Ontario government funding can help you become more competitive.