This document provides an agenda and overview of the Canadian manufacturing sector in July 2019, as presented by Paul Young CPA, CGA. The document discusses key topics such as the PMI index in Canada and the US, failures in manufacturing, sales by sector and province, competitiveness issues, and trends in sectors like automotive, transportation equipment, agriculture, steel production, and housing. It provides sources and analysis on these topics, and concludes with a call for a new integrated strategy between government, education, and the private sector to improve the competitiveness of Canada's manufacturing industry.

1. Manufacturing Sector –
Canada – July 2019
Paul Young CPA, CGA
September 17, 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
• AG Equipment
• Housing
• Steel Production
• Unifor
• Taxation vs Subsidy blog
• Blog – Near Shoring
• Manufacturing Blog
• Solutions

4. Contoso
S u i t e s
4
Introduction
4Source - https://www150.statcan.gc.ca/n1/daily-quotidien/190917/dq190917a-eng.htm

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/
6

7. Contoso
S u i t e s
Manufacturing Sales by Sector
Source – Stats Canada - https://www150.statcan.gc.ca/n1/daily-quotidien/190917/t002a-eng.htm
7

8. Contoso
S u i t e s
Manufacturing Sales by Province
Source – Stats Canada - https://www150.statcan.gc.ca/n1/daily-quotidien/190917/dq190917a-eng.htm
8

9. Contoso
S u i t e s
Source – BMO, RBC, Stats Canada, Scotiabank 9
Housing - Construction
9

10. 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
10
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

11. 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/
11
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

12. Contoso
S u i t e s
Automotive Sector
Source - http://www.gbm.scotiabank.com/scpt/gbm/scotiaeconomics63/autoflash.pdf
12

13. Contoso
S u i t e s
13
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

14. 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
14

15. Contoso
S u i t e s
Source – association of equipment manufacturers 15
Agriculture Equipment - Trends
15

16. 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
16
Canola and China
16

17. Contoso
S u i t e s
Source – KPMG 17
2019 Manufacturing Outlook
17

18. 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.
18
Blog – Taxation vs Subsidy
18

19. Contoso
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
19
Blog – Manufacturing – July 2019
19

20. Contoso
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=
20
Blog – August 2019 - Manufacturing
20

21. 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
21