Ontario Manufacturing Growth Strategy
In 2018, my team and I at the CME partnered with LMEs including Bombardier, Microsoft, Toyota and 3M, as well as with Chambers of Commerce, Economic Development agencies and key industry associations to develop a provincial government strategy for doubling Ontario’s manufacturing output from $300 to $600 billion by 2030.
Powerful research-driven insights, paired with our deep understanding of government and policy helped us create a strategic set of initiatives for the government to undertake which garnered both support and applause from the Ontario Minister of Economic Development, Todd Smith. Next year will see our recommendations put into action. Let’s quickly look at how we got here.
RESEARCH
While Ontario’s manufacturing sector contributes massively to total provincial employment (25%) and GDP (30%), recent statistics revealed a rather grim landscape: Amidst increasing global competition, the sector has seen stagnation in both output and exports, while experiencing a decline in overall investment.
So, we launched a robust research campaign to gather both qualitative and quantitative data to help us find out what was going on. Our data came from:
1. Over 200 manufacturers responding to our bi-annual Management Issues Survey
2. The engagement of over 250 manufacturers in 12 community roundtables across Ontario
3. Executive meetings with Canada’s largest manufacturers including Imperial Oil, Bombardier, Alps Welding, Ford, Toyota, 3M and more.
4. Economic statistical data from industry sources including Stats Canada, Ontario Energy Board, Independent Electricity Systems Operator, United Nations, Ernst & Young, BDO, Skills Canada and more.
As we looked at the data, several critical patterns began to emerge…
insights
Our research efforts revealed a trifecta of macro level issues, two of which were discovered through our correspondence with Ontario’s manufacturers:
1. Problematic increases in the cost of doing business, and
2. Insufficient access to skilled labour. Furthermore, our statistical data revealed a third major group of problems:
3. Suboptimal levels of technological investment, adoption & scaleup.
As we explored these areas more carefully, we were able to identify their underlying issues and formulate a set of strategic initiatives for the provincial government to undertake to help reverse the current economic downtrend.
strategic solutions
To get a feel for the multidimensional strategy we formulated, here is a brief overview of the initiatives we developed, (the details of which can be found in our 32 page report):
1. REDUCE COST OF BUSINESS – To create a more competitive business landscape through lowering the cost of doing business, our strategic recommendations included: Corporate tax reform to reduce financial strain Reducing regulatory burden that otherwise hinders innovation Reducing electricity costs to improve viability of production Regulatory protection from disproportionate property tax provisions Enhancing digital infrastructure and connectivity to global opportunities
2. STRENGTHEN THE LABOUR FORCE – Upon exploring the skilled labour shortage, we found several solutions to current bottlenecks in the system: Improving the pathways for potential talent to transition from post secondary education into the workforce Increasing support for apprenticeships and other forms of experiential (work-integrated) learning Actively focusing on strengthening STEM education (science, technology, engineering and mathematics) Reviewing and reforming immigration policies to increase the flow of new potential talent into Canada
3. ADVANCING THE SECTOR – In order for Ontario’s Manufacturing sector to once again compete at the highest level globally, we need accelerate manufacturers’ use of innovative technology, attract greater foreign investment, and foster greater scale-up and commercialization
Accelerating innovation – Key solutions included risk-share programs to mitigate manufacturers’ risk of adopting new infrastructure, as well as creating manufacturing hubs and relaunching the Technology Visits Program to increase manufacturers’ access to, and education about available manufacturing innovations.
Attracting foreign investment – To help increase the flow of capital into Ontario, we recommended setting up a closely monitored investment attraction office, as well as funding direct investment support programs with globally competitive incentives.
Fostering scale-up and commercialization – We identified four solutions to help increase the scale-up and commercialization of Ontario based products and technologies:
+ Increasing government’s direct use of Ontario-manufactured products and tech
+ Development of a risk-sharing program to improve productivity and commercialization
+ Leveraging corporate tax reductions to incentivize production and commercialization of Ontario-based goods and technologies
conclusion
While the bulk of 2018 was spent researching, investigating and formulating strategy, 2019 marks the beginning of execution. This is where we begin leveraging our expertise in government relations & lobbying, strategic communications, and stakeholder dynamics to start bringing these initiatives to life.
