Technological advancements
Since small to medium-sized companies account for nearly 93 percent of Canada’s manufacturing industry, it is crucial for these businesses to adopt the technological advancements that are an integral part of today’s society. With the rise of artificial intelligence (AI), industry leading companies have been finding new strategies to implement the use of AI in their manufacturing processes. Recently, AI has been used to instill tactics that increase productivity and predict maintenance needs before they occur.
The Industrial Internet of Things (IIoT) is commonly used to produce data and insight by connecting production lines to machinery through smart sensors. These analytics that are provided through the use of IIoT allow companies to collect data on how consumers respond to changes in operation.
With the increase in labor shortages, Canadian manufacturers have been implementing automation throughout their facilities. While introducing automation helps make up for the loss of employees, it also increases production output. Robotics and other smart equipment have proven to be beneficial by producing high levels of output while keeping downtime to a minimum.
Automotive Ranks Among the Largest Export Industries in Canada
Most of Canada’s manufacturing is in Ontario, accounting for $98 billion at 47 percent of the country’s manufacturing sales. And of that production, the province manufactures more automobiles than any other area in North America, with parts, components and assembly plants clustered around the Toronto CMA. Companies such as Toyota, Honda, Ford, Chevrolet and Jeep represent some of the highest automobile domestic and export manufacturing sales, as well as among the top employers.Of the 10 largest export industries in Canada, SUV and light truck ranks number two at $31 billion, while car and other automobile manufacturing ranks nine at nearly $10 billion.
Sustainability
In response to the EU’s Green Deal Reduction Plan, the government has implemented a net-zero industrial policy called the “made-in-Canada plan,” in hopes of steadily reducing the amount of carbon emissions introduced from the industrial sector to encourage a greener future. By administering this plan, Canada’s manufacturing industry may be unaffected for the time being- since Canada’s carbon emissions tax has yet to be set. In the near future changes may need to take place to decrease the emissions made by parts of the manufacturing industry, however this evolution has already begun by the use of cleaner IIoT manufacturing processes.Trade agreements and government policies
The United States, Mexico and Canada Agreement (USMCA) is playing an integral role in Canada’s manufacturing industry by promoting growth and partnership between each country. According to The Office of the United States Trade Representative, Canada has “reiterated their commitment to promote mechanisms to increase competitiveness and encourage the active participation of SMEs in international trade, especially for those SMEs led by groups that are traditionally underrepresented.” This will not only improve Canada’s production output to the United States and Mexico but will also provide trade opportunities for small to medium enterprises to become part of the trade agreement.Continuously, as part of the USMCA, each benefiting country mutually agrees to “implement the Agreement’s obligation to ban the importation of goods produced by forced labor,” providing a safer and healthier workforce for all peoples. By providing a safer and more competitive work environment through USMCA and already existing agreements, such as the Foreign Investment Promotion and Protection Agreement (FIPA) and Canadian Free Trade Agreements (FTAs), Canada is prepared for their economy to grow.
Economic conditions
Like many other countries, Canada still hasn’t fully recovered from the COVID-19 pandemic. Economic challenges are predicted for the short and medium term, resulting in an increasing cost of living among Canadian citizens. According to the OECD, “growth in real GDP is projected to slow from 3.2 percent this year to 1 percent in 2023 before strengthening to 1.3 percent in 2024." This implies that the Canadian manufacturing industry can expect a consistent production output from an economic standpoint with an increase of exports.Conclusion
There are many changes occurring in Canada’s manufacturing industry. With the proper information about technological advancements, sustainability, government policies and economic conditions, the industry can become more aware of how to manage output in an evolving society. Yet with the right amount of knowledge, Canadian manufacturers can more easily navigate these guidelines.
Sources include:
- Office of the United States Trade Representative
- Forbes
- Government of Canada
- SAP Concur
- Corporate Knights
- KPMG
