Canada, it's time to make things again
Build the way to our prosperity.
Canada is blessed with a rocks and crops economy. We have an incredible abundance of natural resources that gives us a foundational base for the economy. To secure more wealth we simply have to dig or plant more, and it is still generally true. The world demands what we have under our feet, and it’s basically a lottery win to be in this position.
As enriching as it is, it will only take us so far, and we really need to build on what we have. We cannot discuss national strategy without manufacturing leading the way, and Canada’s manufacturing sector has been declining for decades.
In the 1960s, manufacturing was over 20% of Canada’s GDP. It is now around 10% but is responsible for over $350B of our exports. Since 2005, per-capita manufacturing output has contracted by 30%, the US has seen 10% growth for comparison.
We could easily have a sustainable, positive trade balance with the world, driving our economy, if we had a robust manufacturing sector. The decline in its share of GDP isn’t the only warning sign. The sector hasn’t increased in productivity in over a decade, which speaks to the lack of investment and innovation in it. Simply, Canada’s manufacturing sector is becoming obsolete.
A productive manufacturing sector enhances Canada’s ability to withstand trade tensions, tariffs, geopolitical issues, and global supply chain disruptions. It is a matter of national security. This persistent productivity gap and falling behind our peers also reduces our global competitiveness. Currently, Canada is the only major economy with a manufacturing sector in contraction.
Our new BC Ferries are made in China, a huge part of our LNG plants are made overseas and are assembled together in Canada, our military isn’t self-sufficient, etc. We are missing out on billions of dollars. We used to make things, and we need nothing short of a renaissance in our manufacturing sector.
Upgrading raw materials adds diversification to the natural resources value chain, helping reduce the volatility that comes with commodity prices. Our natural resources and unlimited low-cost energy potential give us the world-leading leverage that puts us in the most advantageous position for reshoring production. Especially compared to Europe.
This will add a welcoming degree of resilience to our economy and job security. The ripple effect will be wide from academia, and research to secondary support and innovation companies. Manufacturing anchors industrial clusters, and a robust industry breathes life into new industries that Canada so desperately needs to participate in.
Canada’s return to manufacturing must be in the form of Industry 4.0 and serve as an engine of innovation. IIOT, robotics, sensors, and AI will be an integral part of new manufacturing, unleashing our productivity. Blue-collar to new-collar.
The only ceilings Canada has holding us back from prosperity and massive success are the ceilings we create for ourselves. This is one of them. Time to break through it.