Here is a look at the goods producing sector

1. Goods Producing Sector –
Canada – August 2019
and September 2019
Paul Young CPA, CGA
October 26, 2019

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S u i t e s
Paul Young - Bio
• CPA, CGA
• Financial Solutions
• SME – Business Process Changes
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – Supply Chain Management
• Academia – Advance Accounting, Public Finance
and Advanced Management Systems
Contact information:
Paul_Young_CGA@Hotmail.com

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S u i t e s
Agenda
• PMI Index – USA and Canada
• EPIC failures with Manufacturing
• Manufacturing by key Sector
• Manufacturing by Province
• Competitiveness
• Automotive
• Class 8 Truck
• AG Equipment
• Housing
• Forestry/Sawmills
• Steel Production
• Energy Sector
• Unifor
• Taxation vs Subsidy blog
• Blog – Near Shoring
• Manufacturing Blog
• Solutions

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S u i t e s
4
Introduction
4Source - https://www150.statcan.gc.ca/n1/daily-quotidien/190917/dq190917a-eng.htm
• Goods producing sector has faced cost and productivity issues. - https://www.slideshare.net/paulyoungcga/what-is-
going-on-with-canadas-competitiveness
• Goods producing sector pays on average 30-40% more than the service sector. Only about 8% of all new net jobs since
November 2015 have been goods producing sector
• Goods producing sector employs about 4,000 workers across Canada or about 30% of all employment
• All levels of government and the private sector need to work together to betters support the goods producing sector

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S u i t e s
Source - https://tradingeconomics.com/united-states/business-confidence or
https://tradingeconomics.com/canada/manufacturing-pmi
5
PMI Index
USA PMI Index Canada PMI Index

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S u i t e s
Source - https://qz.com/1269172/the-epic-mistake-about-manufacturing-thats-cost-americans-millions-of-jobs/ 6
Epic mistake by Manufacturing
• Unions fought automation as it meant less union jobs
• Robotics have played key role with manufacturing
• More and more manufacturers are moving to 3-D Printing. Market size potential is $33B -
https://www.prnewswire.com/news-releases/world-3d-printing-in-digital-manufacturing-
market-outlook-2018-2023---3d-printing-is-one-of-the-cornerstones-of-industry-4-0-and-will-
facilitate-evolution-of-supplydemand-economics-300715302.html
• AI continues to help streamline manufacturing processes - https://supplychainbeyond.com/7-
ways-ai-and-automation-are-driving-the-future-of-manufacturing/
• Trudeau never had the policies to handle Trump -
https://www.youtube.com/watch?v=Gwsn3twqwZ0&t=42s
• NDP is against natural resources - https://www.thestar.com/opinion/star-
columnists/2019/05/14/jagmeet-singhs-call-for-fossil-fuels-ban-
leapfrogs-the-leap-manifesto.html
• `
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S u i t e s
Manufacturing Sales by Sector
Source – Stats Canada - https://www150.statcan.gc.ca/n1/daily-quotidien/191017/dq191017a-eng.htm
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S u i t e s
Manufacturing Sales by Province
Source – Stats Canada - https://www150.statcan.gc.ca/n1/daily-quotidien/191017/dq191017a-eng.htm
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S u i t e s
Source – BMO, RBC, Stats Canada, Scotiabank 9
Housing - Construction
9

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S u i t e s
10
Forestry Sector • Forestry Sector in Crisis -
https://www.theglobeandmail.com/busines
s/article-bc-forestry-companies-set-to-
report-poor-third-quarter-results-amid/
• Softwood lumber has been impacted by
USA home sales slow down as well as
unresolved issues with trade -
https://madisonsreport.com/lumber-prices/
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S u i t e s
Source - http://cme-mec.ca/wp-content/uploads/2018/11/Doc_Industrie-2030_Manufacturing-a-Competitive-Business-
Environment-in-Canada.pdf
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Competitiveness
I have been saying the following for since
Liberals took office in 2015
• Low taxes free up money to reinvest in
new capital and advanced technologies
• A strategic taxation policy can reward
companies for growing
• An easy-to-navigate regulatory
environment reduces the cost of doing
business in Canada and makes
domestic companies more competitive
Strategic government spending on
economic and trade-related
infrastructure improves productivity
and Canada’s ability to compete in
foreign markets
Note:
Many thanks to Deloitte for providing a
similar view to mine in terms of solutions.
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S u i t e s
Automotive Sector
Source - http://www.gbm.scotiabank.com/scpt/gbm/scotiaeconomics63/autoflash.pdf
12
https://www.autonews.com/manufacturing/uaw-wants-quicker-path-top-wages - “Now, General Motors' resistance to letting workers attain full pay faster is
seen as one of the reasons the union has been on strike since mid-September. UAW members today argue that eight years is too long to wait, especially as the
automakers amass record profits and dole out lucrative bonuses to executives.”

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S u i t e s
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Class 8 Truck Production
Key Changes
• Driverless Trucks - https://singularityhub.com/2018/10/11/no-safety-driver-here-volvos-new-
driverless-truck-cuts-the-cab/
• Electrical Vehicle - https://electrek.co/2018/05/02/peterbilt-truck-maker-all-electric-class-8-tesla-
semi/
• Uber and Transportation - https://www.cnbc.com/2019/05/15/convoy-flexport-automating-the-
shipping-industry.html
• Plug-in station - https://www.plugshare.com/location/15209
• Technology Changes – IoT- https://www.logisticsbureau.com/6-key-supply-chain-and-logistics-trends-
to-watch-in-2017/
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S u i t e s
Steel
Production
• Steel production continues to face challenges -
https://www.financialexpress.com/market/commodities/steel-
industry-looking-at-brighter-prospects-in-2018/1035442/
• Steel producers are concerns with tariffs -
https://www.cbc.ca/news/politics/steel-tariff-zekelman-freeland-
1.4869440?fbclid=IwAR29Hosw-7ZZGSPihTnTdPt4xp1mOblaSfkCx-
CFYi5-axDFHqwbtLw2AXg
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S u i t e s
Source – association of equipment manufacturers 15
Agriculture Equipment - Trends
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S u i t e s
1616
Food Exports • Govt of Canada and support of Farmers -
https://betterfarming.com/digdeep/ag-
industry-s-fight-for-government-support
• Dairy and support -
https://www.newswire.ca/news-
releases/dairy-farmers-of-canada-eager-to-
work-with-new-government-
869276397.html
• Unifor and AG sector -

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S u i t e s
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Energy Sector
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Canada Oil Production to account for 25% of the world oil -
https://www.forbes.com/sites/judeclemente/2019/10/09/canada-to-add-nearly-25-of-new-global-crude-oil-
supply/#664afd1e7ce5
Canada oil sector continues to struggle - https://www.cbc.ca/news/canada/calgary/deloitte-alberta-oil-gas-production-
forecast-price-curtailment-1.5306143
USA continues to see a growth with oil production - https://news.yahoo.com/world-awash-oil-u-sees-063414345.html

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S u i t e s
Source – KPMG 18
2019 Manufacturing Outlook
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S u i t e s
Source - https://www.spencerfernando.com/2018/11/15/dias-bias-union-representing-thousands-of-canadian-journalists-
calls-themselves-resistance-against-scheer/
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Unifor / Jerry Dias • Dias never speaks out against bad policies like high hydro
rates, carbon taxation, excessive regulations, etc.
• Unifor is defending media which is only a small percentage
of his base https://www.unifor.org/en/unifor-numbers-
across-canada
• Unifor is not looking out for its members. Unifor almost
cost CAMI their jobs -
https://business.financialpost.com/transportation/autos/g
m-strike
• Unions have a place but Dias approach is always
confrontation.
• Harper had a bill that shut down by the liberals that would
have provided oversight -
https://www.thestar.com/news/canada/2012/12/12/prime
_minister_stephen_harpers_government_passes_bill_forci
ng_unions_to_open_their_books.html
• Unions spend part of the dues on election campaigns -
https://www.cbc.ca/news/canada/toronto/union-backed-
group-fights-ontario-rules-on-election-advertising-
1.4501104
Dias says little on
other sectors which
account for 95% of the
jobs right?
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S u i t e s
• Douglas Gray No it does not! Oil pays their taxes and gets their tax deduction. Clean Tech gets R&D and/other
deductions like Oil and Gas. Clean Tech loses money which means they do not pay corporate taxation as there is no
taxable income. https://www.slideshare.net/paulyoungcga/how-corporate-and-business-taxation-flows-to-government
• The liberals are handling grant money out to clean tech via SDTC - https://www.sdtc.ca/en/
• My advice to you is stop taking comments from people that have never done a corporate tax return in their life.
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Blog – Taxation vs Subsidy
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S u i t e s
• https://www.mhlnews.com/global-supply-chain/75-companies-missing-growth-opportunities-supply-chain?NL=IW-
09&Issue=IW-09_20190715_IW-
09_348&sfvc4enews=42&cl=article_1&utm_rid=CPG03000003273915&utm_campaign=35965&utm_medium=email&el
q2=076b32e2b6b14736b7ae302421a5ea3f&oly_enc_id= - Based on a survey of 1,350 business executives, the report
"From Inventory to Influence: The Mover Becomes the Shaker" reveals that more than three-quarters (78%) of
executives and their companies — named the “Laggards”— are missing opportunities to leverage the power of the
supply chain as a driver of revenue growth.
• https://www.atkearney.com/operations-performance-transformation/us-reshoring-index
• I am all for supporting merchandise trade, but trade must be fair. The problem is the WTO needs to be reformed to
ensure emerging markets follow rules.
• WTO Reforms - https://asia.nikkei.com/Politics/G-20-summit-Osaka/G-20-leaders-agree-to-speed-up-WTO-reforms2. I call the WTO
out numerous times - https://www.slideshare.net/paulyoungcga/world-trade-organisation-wto-and-trade-disputes
• Tariffs never work as all they do is make items more expensive.
• China has seen deterioration as many countries pushed back at China’s unfair trade policies -
https://www.bloomberg.com/news/articles/2019-07-12/singapore-s-economy-contracts-sharply-as-manufacturing-slumps
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Blog – Manufacturing – July 2019
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S u i t e s
• https://business.financialpost.com/news/economy/drop-in-autos-leads-surprise-decline-in-canadian-
manufacturing?utm_term=Autofeed&utm_medium=Social&utm_source=Facebook&fbclid=IwAR0h1-FUqH9t7ArreYiTVxFIl1e72lut4mUIJ4czm6kNtou57-
_JZzCH0as#Echobox=1560880341
• Trump gets it about the economy unlike Trudeau who thinks the private sector is his own instant teller machine. https://www.marketwatch.com/story/manufacturing-
employment-in-the-us-is-at-the-same-level-of-69-years-ago-2019-01-04?mod=mw_share_facebook&fbclid=IwAR2SQq6EWaK-
OxnNXJdcJ_VSgFVwqu5WCY9SxhC_wj6c26U15LRRgvScTAM
• https://www.slideshare.net/paulyoungcga/2019-election-manufacturing-canada-april-2019
• Canada has become less competitive due to excessive regulations and taxes
• Hydro rates are a big issue
• Zero emissions have a carbon footprint
• 20% of the power generation in Canada is from non-clean sources - https://www.slideshare.net/paulyoungcga/2019-election-power-geneation-canada-march-2019
• Near Shoring - https://urldefense.proofpoint.com/v2/url?u=http-3A__app.link.pentonmanufacturing.com_e_er-3Fs-3D893956921-26lid-3D264282-26elqTrackId-
3D9737e8674da84df0a0c7ecd0ffc8e57d-26elq-3De623d9fb8e12407284ecfffe0ef3f967-26elqaid-3D35869-26elqat-3D1-26utm-5Frid-3DCPG03000003273915-26utm-
5Fcampaign-3D35869-26utm-5Fmedium-3Demail-26elq2-3De623d9fb8e12407284ecfffe0ef3f967-26oly-5Fenc-5Fid-3D&d=DwMCaQ&c=jf_iaSHvJObTbx-siA1ZOg&r=-
jdq6iV4dQJQo01vxt-OMsPRLAz4KWhUHwAxRjDtksM&m=94zypWvlHILTKxiV8zG9rHQvRTcAUUoqkZvxV17REKo&s=Qp-
PJklo8euzuP_wsWKVuH_0mgycxc4hiXTUEicvkHI&e=
• USA MFG - https://www.industryweek.com/economy/manufacturing-s-potentially-ominous-future?NL=IW-07&Issue=IW-07_20190715_IW-
07_503&sfvc4enews=42&cl=article_1_b&utm_rid=CPG03000003273915&utm_campaign=35967&utm_medium=email&elq2=0ade1006ff574a94894fa8c335535fc7&
oly_enc_id=
• Smarter Manufacturing - https://www.industryweek.com/operations/smart-manufacturing-institute-announces-new-project?NL=IW-07&Issue=IW-07_20190722_IW-
07_929&sfvc4enews=42&cl=article_2_b&utm_rid=CPG03000001519274&utm_campaign=36103&utm_medium=email&elq2=16a2b29bf2ff4ca4906fafd2dcd88085&o
ly_enc_id=
• USA https://www.industryweek.com/industryweek-us-500/iw-us-500-tariffs-make-their-mark?NL=IW-07&Issue=IW-07_20190813_IW-
07_862&sfvc4enews=42&cl=article_2_b&utm_rid=CPG03000001519274&utm_campaign=36550&utm_medium=email&elq2=2c5f775a977246a49e9fc329d398ac86&
oly_enc_id=
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Blog – August 2019 - Manufacturing
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S u i t e s
Solutions
• Canada’s manufacturing is at a crossroads as such
needs to have a new strategy. The Liberals decision
to impose carbon tax, more regulations (C69), failure
to make critical investments in export related
infrastructure, small business tax changes, etc. have
made Canada less competitive
• Canada needs an integrated strategy that involves all
level of government, education and private sector as
part re-visiting incubation centers. Government role
is not to pick winners and losers but to support
policies that will allow equal access to every
business.
• Provinces need a partner in Ottawa that is not about
more tax and excessive regulations (C69)
• Provinces need to get their policies in check
including hydro rates, taxation and labor reforms
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