Speech Article from  Federal Economic Development Agency for Southern Ontario

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Speaking Points

The Honourable Gary Goodyear, Minister of State for the Federal Economic Development Agency for Southern Ontario

Hamilton, Ontario

April 30, 2015

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Good morning.

It's a pleasure to be here and I'd like to thank the Canadian Manufacturers and Exporters, or CME, and Mohawk College for the opportunity to speak to you all.

I understand that this is the first full-day event organized by CME's Canada Makes network, which is dedicated to promoting the use of advanced and additive manufacturing in Canada.

I just had the pleasure of touring Mohawk College's Additive Manufacturing Resource Centre and I'm proud to say that southern Ontario is home to one of only a few facilities in Canada with additive manufacturing machines capable of producing high-quality metal parts.

I know that my colleague, Minister Holder, toured the Centre recently as well. And that he announced $2.3 million for the College to provide additive manufacturing capabilities to local companies to develop and enhance their products.

This is particularly relevant to our economy as numerous analysts are reporting that the 3D printing market globally will increase dramatically in the coming years. Additive manufacturing holds especially strong promise for some of Ontario's most important industries, including automotive parts manufacturing.

Ladies and gentlemen, it's not even 9:30 and I've already had a busy morning. Jayson and I were also pleased to co-host an advanced manufacturing roundtable. This is part of a series of roundtables that is allowing our Government and CME to learn more about the needs of our manufacturing businesses.

In this environment of globalization, it is natural to see businesses move, shut down or consolidate operations. Yet we can still build on opportunities to create, grow or attract businesses to the region, to replace the ones that we have lost.

Some of you may have heard me say before — we can, and we must, seize opportunities to leverage emerging technologies and improve productivity. That's why gatherings such as these are so important. And it's wonderful to see a network like Canada Makes, with private, public, academic, and non-profit entities working together to further develop this exciting new chapter in Canadian manufacturing.

The Government of Canada is also taking action to support the manufacturing sector, as outlined in the budget that my colleague, the Honourable Joe Oliver delivered last week.

Let me take a moment to speak about our Economic Action Plan overall.

Our Government has cut taxes for job-creating businesses; invested in research and development; expanded markets for Canadian businesses abroad; committed unprecedented support for job-creating infrastructure; and established the framework for the responsible development of our natural resources.

Our strategy is working.

Since the depths of the Great Recession, more than 1.2 million net new jobs have been created—overwhelmingly full-time, well-paying and in the private sector.

At the same time, our Government has lowered taxes every year since coming into office, and has delivered the lowest overall federal tax burden in more than 50 years.

According to KPMG, total business tax costs in Canada are the lowest in the Group of Seven (G-7) and 46 percent lower than those in the United States.

Since 2006, our Government has taken significant action to reduce taxes for businesses in all sectors, including manufacturing.

Economic Action Plan 2015 cuts taxes even further for small business owners. It proposes to reduce the small business tax rate to 9 percent by 2019. This will be the largest tax rate cut for small businesses in more than 25 years.

It is estimated that this measure will reduce taxes for small businesses and their owners by $2.7 billion from 2015 to 2020.

Low taxes encourage capital investment, which in turn spurs job creation.

But we know we can do more to support businesses, especially manufacturing businesses such as you all gathered here today.

And what is good for Canadian manufacturers is good for Canadians. Canada's manufacturing sector is a cornerstone of the economy, accounting for more than 10 per cent of Canada's gross domestic products, and employing1.7 million Canadians. The manufacturing sector drives a high-tech, high-skilled economic engine.

For this Government, the words “Made in Canada” continue to fuel pride, not to mention jobs.

Still, we cannot address the challenges of today and tomorrow with yesterday's thinking. We must give manufacturers the tools they need to create the products – and the jobs – of the future.

This is why we are proud to introduce in Economic Action Plan 2015, substantial support for this sector in the form of an accelerated capital cost allowance for machinery and equipment used in manufacturing and processing.

This new, 10-year tax incentive will result in a deferral that is expected to reduce federal taxes for manufacturers by $1.1 billion over the period from 2016 to 2020.

Providing the new incentive over a 10-year period gives businesses greater planning certainty for larger projects that take time to fully realize, including those with multiple phases.

When Canadian companies invest in state-of-the-art equipment and structures, they increase their productivity and competitiveness.

Canada's auto parts industry is a fundamental part of our manufacturing sector.

Canadian automotive suppliers must increasingly make new product development central to their business strategies. This will help them to meet the demands of vehicle manufacturers for innovative products to address a range of needs, including new fuel efficiency standards and growing consumer interest in connected vehicle technologies.

To this end, Industry Minister James Moore launched on Tuesday the Automotive Supplier Innovation Program, as outlined in Economic Action Plan 2015. The Government of Canada will begin accepting applications for funding through the program in June 2015.

This new program is designed to fill a gap between early-stage basic research and pre-commercial development. Eligible activities will include prototype development, process engineering, and pre-commercial product testing and validation. Each company is eligible to receive up to $10 million over the term of the program and will require a minimum of 20 percent from an SME partner.

This investment of $100 million over the next five years will support our auto parts industry as it continues to evolve, and to establish a secure role in global supply chains.

Canada is also among the leading aerospace jurisdictions. However, the performance and competitiveness of the country's supply base, made up of many small and medium-sized firms, is crucial to continued success.

With Economic Action Plan 2015, our Government will work with the Aerospace Industries Association of Canada and other industry and provincial stakeholders to develop a national aerospace supplier development initiative. This is with funding of $6 million in 2016–17 reallocated from the Strategic Aerospace and Defence Initiative.

The final area I'd like to touch on is international trade and investment. These are vital to the continued growth of the Canadian economy and contribute to the prosperity of people and businesses across Canada.

Access to foreign markets and the reduction of trade barriers are necessary to help Canadian exporters grow.

Since 2006, the Government has concluded free trade agreements with 38 countries, bringing Canada's total to 43.

With new trade agreements complete, and more to be in place soon, Economic Action Plan 2015 proposes $152 million in trade promotion investments over the next five years to help Canadian businesses fully capitalize on global opportunities.

We also recognize that domestic trade barriers can undermine business productivity and competitiveness. That is why, since 2009, Canada has unilaterally eliminated more than 1,800 tariffs, providing more than $450 million in annual relief to Canadian manufacturers. This also include the elimination of all remaining tariffs on imported machinery and equipment and manufacturing inputs, making Canada a tariff-free zone for industrial manufacturers.

Creating the best conditions for businesses to succeed is also a key focus of FedDev Ontario.

FedDev Ontario has partnered with organizations such as CME, the Yves Landry Foundation and the Ontario Chamber of Commerce. We did this to support manufacturing-related business activities, given how important the sector is to our region.

In fact, since 2009, FedDev Ontario has committed almost $350 million to an expected 2,100 direct and indirect manufacturing projects.

This includes the $20-million investment I announced last November for the CME's SMART Advanced Technologies for Global Growth program. It provides funding for export-oriented manufacturers looking to invest in advanced technologies.

Today, I'm pleased to announce that CME has to date awarded more than $1 million to 15 projects through this program across southern Ontario.

This includes $100,000 for Felton Brushes here in Hamilton. This local company was established in 1933 and manufactures wire power brushes. These are used for various purposes, such as cleaning drill pipes.

The CME SMART funding will help the company acquire a machine to automate a process that has to date slowed its ability to compete for business in the global market. This adoption of advanced manufacturing technology will help Felton reduce its waste, improve labour productivity and ultimately grow its export markets.

This is a great example of a local company receiving targeted support to adopt advanced technologies and improve its operations to compete globally.

With the various measures outlined in Budget 2015 and the resources available through networks such as Canada Makes, I hope that more manufacturers will seize opportunities for growth.

I'd like to thank the organizers again for inviting me here to speak today and I wish you all a very productive forum.

Thank you.

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