Labour in short supply as manufacturing thrives

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This article was published 31/05/2023 (330 days ago), so information in it may no longer be current.

The manufacturing sector in Manitoba is thriving.

That’s good news for the provincial economy because the sector represents 10 per cent of the GDP — 17 per cent considering what economists refer to as indirect and induced impacts.

But like every other sector of the economy these days, it is in the midst of a human resources crisis.

The Manitoba chapter of the Canadian Manufactures recently reported that it had 2,130 job vacancies in the third quarter of 2022, compared to an average of 900 over the years 2015-to-2019.

Positions for specialized skills like power engineers are going unfilled across the country.

At the same time, the sector’s unemployment rate remains very low, standing at just 1.5 per cent in February 2023, implying that very few people are looking for work in manufacturing.

At the annual meeting of the Manitoba chapter of the Canadian Manufacturers and Exporters, Michelle Finley, an official from Roquette, the French company that built the $550-million plant protein manufacturing plant in Portage la Prairie, made it clear that Roquette’s experience endorses the adage that Manitoba is open for business.

But the point was made that less than two hours away the cost of doing business south of the border can be substantially less. There is no carbon tax, for one thing.

Ron Koslowsky, the head of CME Manitoba, has long been an advocate for funnelling the carbon tax manufacturers pay back into the industry in some form.

The manufacturing industry prides itself on its commitment to reinvestment in its businesses whether it be in technology or in human resources. It bristles at things like the carbon tax if that does not result in reinvestment in the industry. What the industry would really like to see in Manitoba and across the country is tax credits for both technology investments and training expenses.

Matt Poirier the senior director, policy and government relations at CME’s national office in Ottawa, who spoke at the Manitoba CME meeting, uses the example of a 10 per cent federal tax credit in Atlantic Canada for investments in machinery and equipment.

Some of the provinces have layered on a provincial tax credit of their own, effectively making it a 20 per cent tax credit in some provinces.

“It’s a great program,” Poirier said. “We’re saying let’s expand it across the entire country. Provide the industry with a tax credit for anything that improves the productivity of a manufacturing facility.”

That same argument can be made for the implementation of a tax credit for training.

Increasingly manufacturing requires ever more specialized skills that are not necessarily on the curriculum of local colleges, regardless of how nimble and responsive they can be.

Koslowsky has long promoted the industry’s independent predispositions and will regularly remind anyone listening of the oversized role the industry plays in this province.

That’s why rather than wait for the right government program that will meet the specific needs of a company, Koslowsky and CME say, keep the money in the hands of the companies and let them source their own training.

For instance, the global trend in the industry is towards automation and digitization. That’s sometimes called advanced manufacturing, or manufacturing 4.0.

It is one thing for a company to invest in such technology, it is another thing for them to find the skilled workers — or train their own — to run the new tech and service it.

Industry officials say there is already a bottleneck occurring for those types of skilled workers compromising the productivity gains of the original investment.

Koslowsky and the CME has already got its asks ready for this fall’s provincial election.

It wants whichever party that forms the next election to establish a tax credit to offset workforce training and development costs.

At the same time it wants to see the existing Manitoba Manufacturing Investment Tax Credit increased from eight per cent to 10 per cent and make it fully refundable.

“How do you encourage skills development? You encourage training,” he said. “How do you do that? You don’t have a government program with a bureaucracy set up to administer a training program. Just let the manufacturers find their own training. They are already doing that. In other words it will cost you a little less on your taxes because you are training people.”

The CME is talking about a 50 per cent tax credit on training for manufacturers.

If the skills shortage crisis last much longer, it will be increasingly difficult to argue against the merits of such a program.

martin.cash@freepress.mb.ca