Manufacturing sales increased 2.1% to $58.0 billion in March, following a 0.2% decrease in February and a 0.9% gain in January. The transportation equipment, petroleum and coal product, and primary metal industries posted the largest gains in March. Overall, sales were up in 12 of 21 industries, representing 56.4% of the Canadian manufacturing sector. Source - https://www150.statcan.gc.ca/n1/daily-quotidien/190516/dq190516a-eng.htm

1. Manufacturing Sector –
Canada – March 2019
Paul Young CPA, CGA
May 16, 2019.

2. Contoso
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

3. Contoso
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
• Steel Production
• Unifor
• Taxation vs Subsidy blog
• Solutions

4. Contoso
S u i t e s
Manufacturing sales increased 2.1% to $58.0 billion in March, following a 0.2% decrease in February and a 0.9% gain in
January. The transportation equipment, petroleum and coal product, and primary metal industries posted the largest gains
in March.
Overall, sales were up in 12 of 21 industries, representing 56.4% of the Canadian manufacturing sector.
Source - https://www150.statcan.gc.ca/n1/daily-quotidien/190516/dq190516a-eng.htm
4
Introduction

5. Contoso
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

6. Contoso
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/

7. Contoso
S u i t e s
Manufacturing Sales by Sector
Source – Stats Canada
7

8. Contoso
S u i t e s
Manufacturing Sales by Province
Source – Stats Canada
8

9. Contoso
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
9
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.

10. Contoso
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/
10
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?

11. Contoso
S u i t e s
Automotive Sector
Source - http://www.gbm.scotiabank.com/scpt/gbm/scotiaeconomics63/autoflash.pdf

12. Contoso
S u i t e s
12
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/

13. Contoso
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
13

14. Contoso
S u i t e s
• Exports / Canola
•
• https://www.cbc.ca/news/business/canola-china-export-1.5043182
•
• @jimcarr_wpg are you going to act on Canola or not?
https://www.cbc.ca/news/business/canola-china-export-1.5043182
@PierrePoilievre @MichelleRempel
I have never see a govt that sits on their hands when things are imploding!
@emilia_suze
14
Canola and China

15. Contoso
S u i t e s
Source – KPMG 15
2019 Manufacturing Outlook

16. Contoso
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.
16
Blog – Taxation vs Subsidy

17. Contoso
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