- The document analyzes the state of Ontario's manufacturing sector and identifies key issues facing it. It provides an overview of employment trends in manufacturing from 2003-2018 and analyzes specific industries like automotive, steel, food processing, and mining. It discusses challenges like high taxes, regulations, hydro rates, and a lack of investment in innovation that have made Ontario less competitive for manufacturers. The document recommends policy priorities around competitiveness for political parties in the upcoming 2018 Ontario election.

1. ONTARIO MANUFACTURING
SECTOR – ANALYSIS AND
COMMENTARY
PAUL YOUNG CPA, CGA
MAY 4, 2018

2. PAUL YOUNG - BIO
• CPA, CGA
• Academia (PF1, FA4, FN2, MU1 and MS2)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Emerging Technology
• SME – Financial Solutions
• SME – Business Process Change
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

3. SUMMARY
• ONTARIO IS LESS PRODUCTIVE SINCE LIBERALS TOOK OFFICE IN 2004
• THE JOBS PROSPERITY FUND HAS DONE LITTLE TO STEM THE TIDE WHEN IT
COMES TO GOODS PRODUCING JOBS LEAVING ONTARIO
• ONTARIO’S GOODS PRODUCING SECTOR GDP HAS BEEN REPLACED BY SERVICE
SECTOR AREAS LIKE REAL ESTATE, DISTRIBUTION AND RETAIL.
• ONTARIO LIBERAL GOVERNMENT HAS NOT FIXED SYSTEMIC ISSUES WITH
TAXES, REGULATIONS, HYDRO RATES, EXPORT RELATED INFRASTRUCTURE.

4. AGENDA
• EMPLOYMENT 2003-2018
• JOBS AND PROSPERITY FUND
• CURRENT STATE
• EMPLOYMENT / GOODS
PRODUCING
• GDP / GOODS
PRODUCING
• PRODUCTION
• AUTOMOTIVE
• STEEL
• CLASS 8 TRUCKS
• MINING
• FORESTRY
• FOOD PROCESSING
• ELECTRICAL
VEHICLES
• COMPETITIVENESS
• TAXATION
• REGULATIONS
• INNOVATION/INVESTMENT
FUNDS

5. 2018 ELECTION CAMPAIGN - MANUFACTURING
Policy Liberal Ontario PC NDP
Corporate tax 11.5% 10.5 Hike to 13%
Carbon Tax Keep Remove Keep
• Ontario is less competitive today due to the following:
• Hydro Rates - https://www.theglobeandmail.com/news/national/high-electrical-costs-have-
driven-thousands-of-manufacturing-jobs-from-ontario-report/article36610740/
• Carbon Tax make doing business in Ontario more expensive
https://www.canadianmanufacturing.com/environment-and-safety/carbon-price-cant-cost-
manufacturers-competitiveness-cme-says-198570/
• Businesses are becoming more sustainable with their operations -
http://www.canadastop100.com/environmental/
• Labour laws - http://canada.autonews.com/article/20180226/CANADA/180229853/magna-
ceo-blasts-ontario-labour-laws-electricity-rates

6. EMPLOYMENT – 2004 TO 2018
SOURCE – STATS CANADA

7. JOBS AND PROSPERITY FUND (JANUARY 1, 2013 TO
PRESENT)
SOURCE - HTTPS://WWW.ONTARIO.CA/PAGE/JOBS-AND-PROSPERITY-FUND AND HTTPS://WWW.ONTARIO.CA/PAGE/JOBS-
AND-PROSPERITY-FUND-REGIONAL-BUSINESS-SUPPORT-PROGRAM-PROGRESS-REPORT-LEAD
Sample of Funding to Private Sector
1. Primary Industries and
Manufacturing loss 40K jobs
since 2013
2. Government role is not to pick
and choose winners
3. Much of the money goes to just
maintaining existing staffing
levels

8. OVERALL MANUFACTURING SECTOR -
ONTARIO
SOURCE – STATS CANADA
• Hydro rates have cost 75,000
manufacturing jobs over the past few
years -
http://business.financialpost.com/opi
nion/75000-manufacturing-jobs-
lost-thats-the-price-of-ontarios-
electricity-disaster
• Carbon taxes do not support GDP
growth as matter fact reduce GDP -
http://business.financialpost.com/co
mmodities/energy/ottawas-carbon-
tax-plan-to-shrink-economy-by-3-
billion-hurt-loonie-in-2018-study
• Ontario has seen reduced productivity
due to poorly constructed tax policies,
labor reforms, regulatory filing issues,
etc -
https://www.competeprosper.ca/blog
/five-things-to-know-about-
ontarios-manufacturing-exports
• Ontario was economic engine of

9. MFG GDP – 2003 THROUGH TO 2014
SOURCE – STATS CANADA

10. AUTOMOTIVE SECTOR
SOURCE - HTTP://WWW.GBM.SCOTIABANK.COM/SCPT/GBM/SCOTIAECONOMICS63/GAR_2018-
01-30.PDF
Issues:
• Labour Laws – Magna is at the
tipping point in terms of
expanding their operations in
Ontario -
https://www.bnn.ca/magna-
takes-aim-at-wynne-government-
s-new-labour-laws-1.810174
• CAMI came within days of closing.
CAMI has sited carbon tax, hydro
rates, other taxes are too high in
Ontario -
http://business.financialpost.com/
transportation/autos/gm-strike
• Wynne has given handouts to
automotive through her jobs and
prosperity funds, but those
handouts in many cases just led to
current jobs being kept.
• Trump’s content rules on NAFTA
could also impact the automotive
sector in Ontario

11. ONTARIO / CLASS 8 TRUCKS
SOURCE – THE TRUCKER
• There are small trailer plants, but
those plants are very small in terms
of size
• Ontario used to produced Class 8
Trucks, but plant closures have
happen like the following:
• Sterling Trucks -
http://www.stthomastimesjourn
al.com/2008/10/14/sterling-
truck-plant-to-close
• Navistar Trucks -
https://kitchener.ctvnews.ca/na
vistar-closing-truck-plant-in-
chatham-ont-1.678209

12. STEEL PRODUCTION / ONTARIO
SOURCE – WORLD STEEL ASSOCIATION
• Wynne implemented carbon tax
ignoring any economic impact study
- http://pricecarbonnow.org/effect-
carbon-pricing-competitiveness-
industries (Steel is carbon based
business
• Steel has modernized over the years
due to changes in manufacturing
processes
• McGuinty made promises on Stelco
Pensions -
https://www.thespec.com/news-
story/2190466-u-s-steel-pensions-
loans-safe-mcguinty-says/
• Liberals never grasp cost pressures
facing large business as such many
large business either scale back
operations or close up all together in
Ontario

13. ONTARIO FOOD PROCESSING SECTOR
SOURCE -
HTTPS://WWW.MENTORWORKS.CA/BLOG/MARKET-
TRENDS/ONTARIO-FOOD-AND-BEVERAGE-INDUSTRY-
Today, approximately 3,800 Ontario
food and beverage processing
companies provide crucial resources
to both local and international
consumers. The province continues to
be an ideal location for business
owners in the food and beverage
industry based on access to natural
resources, innovation, and skilled
labour. In 2016, Ontario’s agriculture
sector increased its total output
by 3% and contributed over $40
billion towards the provincial
economy. However, there is still room
to improve the sectors rate of growth
and development throughout 2017.
Food and Beverage Ontario (FBO)
recently released its annual report
underlining some of the major trends
or areas of concern within the sector.
The top four challenges food and
beverage processing businesses face,
include:
• Workforce development and access
to skilled labour;
• Provincial electricity costs;
• Regulatory issues; and
• Implementation of growth
strategies.

14. ONTARIO MINING SECTOR
SOURCE -
HTTPS://WWW.OMA.ON.CA/EN/ONTARIOMINING/FACTS_FIGURES.ASP
• 9 mine sites operating in Ontario
• Nickel, gold, copper, zinc and platinum group metals
• Diamonds, salt, gypsum, talc, calcium carbonate, nepheline
syenite and other industrial minerals
• Ontario is the largest producer in Canada of gold, platinum group
metals and nickel, and the second largest producer of copper.
The province is also a major producer of salt and structural
materials.
• Mining benefits all areas of the province, providing a broad scope
of employment and entrepreneurial opportunities.
• Ontario is one of the safest mining jurisdictions in the world and
mining is one of the safest industries in Ontario, achieving a 96%
improvement in lost time injury frequency over the past 30
years.
• Value of mineral production in Ontario was $10.8 billion in 2015.
See Ontario mineral production highlights for 2015 and read
about the economic contribution of mining to the province.
• 90% of the mining GDP stays inside Ontario.
• 78,000 mineral production employees include direct employment
of 16,100.
• The opposite can be said
of two of Canada’s other
large jurisdictions —
British Columbia and
Ontario — which dropped
in this year’s rankings.
Internationally, Ontario
places 18th (down three
spots from last year) and
B.C. ranks 27th, more than
ten places lower than its
2015 position (18th).
http://www.mining.com/c
anadas-saskatchewan-
manitoba-worlds-new-
top-mining-destinations/

15. BLOG – ONTARIO MANUFACTURING
• UNITED STATES HAS BEEN EXPANDING MANUFACTURING JOBS AS COMPARE TO CANADA
WHO CONTINUES TO LOSE MANUFACTURING JOBS -
HTTPS://WWW.INSTITUTEFORSUPPLYMANAGEMENT.ORG/ISMREPORT/MFGROB.CFM?SSO=1
• CANADA PMI CONTINUES TO FALL!
HTTPS://TRADINGECONOMICS.COM/CANADA/MANUFACTURING-PMI
• WYNNE CHAMPIONS GROWTH, BUT WHAT SHE DOES NOT SAY IS THAT MANUFACTURING,
MINING, FOOD PRODUCTION AND FORESTRY HAVE BEEN STRUGGLING FOR YEARS UNDER
HER WATCH. WYNNE FOCUS HAS BEEN ON CORPORATE WELFARE, CLEAN TECHNOLOGY
AND GROWING THE PUBLIC-SECTOR PAYROLLS -
HTTPS://WWW.SLIDESHARE.NET/PAULYOUNGCGA/MANUFACTURING-SECTOR-CANADA-
JANUARY-2017

16. ELECTRICAL VEHICLES
• HTTPS://WWW.SLIDESHARE.NET/PAULYOUNGCGA/ELECTRICAL-VEHICLE-MARKET-
WHATS-NEXT-MARCH-2018
• LIBERALS HAVE PROVIDED INCENTIVES AND THEY HAVE FAILED -
HTTPS://GLOBALNEWS.CA/NEWS/3894046/ONTARIO-ELECTRIC-VEHICLE-TARGET/
• LIBERALS PLUG-IN STATIONS HAVE ALSO BEEN A FAILURE -
HTTP://TORONTOSUN.COM/NEWS/PROVINCIAL/LIBERALS-FAILED-TO-PROVIDE-
PROPER-OVERSIGHT-ON-ELECTRIC-CAR-CHARGING-PROGRAM-PC-CRITIC ($20M
DEBACLE)

17. ONTARIO DEBT / DEFICIT
Ontario’s budget watchdog says that the province’s deficit will be $2.6 billion in
2017-18, despite a Liberal government pledge to balance the books by then. The
Financial Accountability Office released its economic and fiscal outlook today, saying
that beyond that fiscal year the deficit will deteriorate further to $3.7 billion in 2020-
21.
Ontario’s Liberal government is dipping into its reserve fund to help balance the
budget for the next two years, ahead of the next provincial election.
An accounting dispute with the auditor general over how pension assets should
appear on the books is adding $2.2 billion to the deficit this fiscal year, but the
government insists it will reach balance by its self-imposed deadline of 2017-18.
Ontario universities face several financial pressures, among them pension solvency
deficits, according to a new commentary by debt rating service DBRS Ltd. (who is on
the hook for the pension shortfall?

18. BLOG/ELECTORATE
You buy that post? I do not!
http://business.financialpost.com/opinion/75000-
manufacturing-jobs-lost-thats-the-price-of-ontarios-
electricity-disaster (Is this a lie?)
Is this information wrong?
https://www.slideshare.net/paulyoungcga/truth-about-
ontario-economy-february-2018
https://www.theglobeandmail.com/news/national/high-
electrical-costs-have-driven-thousands-of-manufacturing-
jobs-from-ontario-report/article36610740/
Liberal policies led to more of the drop
Rebuttal / David Fox

19. WHAT’S NEXT
• ONTARIO – AREA OF FOCUS
• LOW DOLLAR HAS INSULATED ONTARIO FROM GLOBAL PRESSURES
• HIGH HYDRO RATES ARE IMPACTING BUSINESS INVESTMENT -
HTTP://WWW.OCC.CA/PORTFOLIO/EMPOWERING-ONTARIO/
• RED TAPE IS DELAY PROJECTS (HTTP://BUSINESS.FINANCIALPOST.COM/NEWS/MINING/WHAT-
ONTARIO-NEEDS-TO-UNLOCK-RING-OF-FIRES-MINERAL-WEALTH-IS-A-MARSHALL-PLAN
• BROKEN ARBITRATION SYSTEM (HTTP://WWW.CFIB-FCEI.CA/ENGLISH/ARTICLE/6069-GOVERNMENT-
WAGES.HTML
• CARBON TAXATION (HTTPS://WWW.THESTAR.COM/BUSINESS/2016/10/04/HOW-TRUDEAUS-
CARBON-PRICE-PLAN-WILL-AFFECT-FIVE-CANADIAN-INDUSTRIES.HTML OR
• INNOVATION SPENDING (HTTP://WWW.THEGLOBEANDMAIL.COM/REPORT-ON-
BUSINESS/ECONOMY/CANADA-FALLING-BEHIND-IN-RESEARCH-AND-
DEVELOPMENT/ARTICLE21605656/)
• SLOW GLOBAL ECONOMY (HTTP://WWW.GBM.SCOTIABANK.COM/ENGLISH/BNS_ECON/FORECAST.PDF
• ONTARIO BUSINESS INVESTMENT - HTTP://WWW.STATCAN.GC.CA/DAILY-
QUOTIDIEN/160510/DQ160510A-ENG.PDF
• ONTARIO HEADS TO ANOTHER ELECTION IN 2018
• ISSUES AT HAND
• HYDRO RATES
• ECONOMY
• DELIVERY OF PROGRAM SPENDING