Manufacturing group puts forward 'electoral platform’ advocating for new industrial policies

Sebastian Leck
September 1, 2021

See Research Money's guide to the parties' innovation platforms here. We'll be updating the guide with each new development.

The Canadian Manufacturers and Exporters have released an "electoral platform" outlining an industrial strategy that they hope the next Canadian government will adopt.

The advocacy body, which represents more than 2500 manufacturers and exporters across the country, focused on four areas in its proposal: access to workers, stimulating investment in innovation and advanced technologies, increasing Canadian exports and adopting an industrial net-zero policy.

The upcoming federal election is scheduled for Sept. 20. Conservative Party Leader Erin O'Toole has released an innovation plan, while the Liberal Party released its full platform on Wednesday with a list of promises related to research and innovation.

CME's president and CEO Dennis Darby said that its members are concerned about investment and productivity in their sector.

"We have been falling behind in both investment and in productivity relative to our trading partners," he said. "[It's] why, in 2020, our share of global exports is lower than it was 20 years ago. There's a worrying trend over the years that we have not been keeping pace with the adoption of technology."

The pandemic has seen more programs announced to boost domestic manufacturing, including investments in the 2021 federal budget towards bio-manufacturing and the Next Generation Manufacturing Supercluster as well as a proposed reduction in corporate income tax rates for companies involved in manufacturing zero-emission technologies.

The CME — long the proponent of an integrated industrial strategy — is hoping to get traction among the major parties for its proposals. Some of the CME's proposals related to innovation and R&D include:

  • Expanding the Strategic Innovation Fund and making it permanent, and committing "at least $2.5 billion in annual funding to support large capital projects in manufacturing."
  • Relaunch investment support grant programs for smaller firms that would be modelled after the CME SMART programs that were put in place after the 2008 recession.
  • Introduce a "patent box savings program" that will provide a lower tax rate on new products during the commercialization stage.
  • Reform the Scientific Research and Experimental Development (SR&ED) Tax Credit Program to return the base rate to 20 percent and include a refundable component.

They also asked for changes to tax credit programs, including a direct investment tax credit of 10 per cent for new capital equipment purchases for all sizes of companies in every region.

Manufacturing represents more than 10 percent of Canada's total GDP and makes up more than 68 percent of all of Canada's merchandise exports, according to Innovation, Science and Economic Development Canada.

"The reality is, if you want to grow the GDP, you have to export, and if you have to export it means you have to be competitive," Darby said.

Darby said that the current Liberal government has made some progress, especially in training workers, but they haven't developed a full industrial strategy to attract investment and help companies commercialize ideas.

"I think they've fallen short of actually putting together a comprehensive plan that reverses the trends on productivity and on investment," he said.

"Industrial policy very seldom determines elections in Canada. But it would be nice if it did."

Colleges and Institutes Canada also put forward a series of recommendations for the next government on Aug. 30. The association asked for a national micro-credential framework, expanded streams to permanent residency for international students and a national collaboration platform for colleges and institutes to share online resources.

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