Canada needs a manufacturing strategy

The plunging price of oil is raising concern that another energy bust is on the horizon. This serves as a harsh reminder about the limitations of Canada’s current economic growth strategy, which depends largely on the extraction and export of natural resources, but it also reinforces the vital role of manufacturing in building a balanced, sustainable and prosperous economy.

Unfortunately, the current federal government, with its oil-dominated economic vision, has taken a hands-off approach to manufacturing. It’s choice is to blindly follow market forces that pit countries against one another on the basis of cheap products, low wages and disposable jobs.

There is a better choice: developing a national manufacturing strategy that puts Canada in the race to the top, competing on the basis of sophisticated products, fair wages and decent jobs. The key is to develop innovative products our global competition can’t match.

In recent years public policy has focused on boosting investment in research and development and cutting edge technologies, but there’s another element that must get more attention from policymakers: investing in human capital. A highly skilled workforce is essential to innovation and productivity in today’s knowledge-based economy.

The good news is Canada’s formal education system is performing relatively well. Young Canadians (aged 15) are among the world’s top performers in reading, math and science skills. Canada sits in first place among OECD countries with the highest rate of people with a post-secondary qualification.

The bad news is that Canada is performing poorly outside the formal education system. Our record on workplace training is abysmal. Only 30% of Canadians receive some form of it.

And Canada ranks near the bottom of the industrialized world when it comes to government expenditures on training. Employer investment has decreased 40% since 1993. Only 19% of employers who employ skilled-trades workers actually train apprentices.

More training investment
The labour movement is doing its part. Union training centres provide an extensive range of apprenticeship programs and unions are responsible for the most skilled trades training in this country. But we also need employers and governments to step up their game and invest more.

Adopting a partnership approach brings together labour, business, government and the education sector.

The Canadian Labour Congress (CLC) and Canadian Manufacturers & Exporters (CME) have had a long-standing working relationship stretching back over 25 years to the formation of the Canadian Labour Market and Productivity Centre.

In 2009, the CLC and CME formed the Centre for Workplace Skills to promote the adoption of best practices in workplace training. In 2012, we held a series of Roundtables on Workforce Skills that brought leaders from business, labour, and colleges together with federal and provincial officials to discuss labour market challenges and potential solutions.

Most recently, the CLC and CME launched a project to develop a new workplace training and certification program in the manufacturing sector called CertWORK Plus.

More investment and partnerships in workplace training are needed to ensure the Canadian manufacturing sector out-innovates and out-competes the rest of the world; however, building a thriving manufacturing sector requires more than supply side education and training policies.

We also need policies that will influence the demand side of the labour market by targeting and supporting high-value industries that create good jobs in manufacturing, the focus of my next column.

This article appears in the Jan./Feb. 2015 issue of PLANT.