On December 10th, the JDI Roundtable is hosting a webinar called Manufacturing Competitiveness as our Strategy for Post-COVID Economic Recovery. This webinar will feature a panel discussion on what we could do for the economy of New Brunswick with a renewed focus of policy on ensuring the competitiveness of manufacturers in the province. Panelists Adrienne O’Pray, Sheri Somerville and Cathy Simpson will assess how much potential we have to create growth and good jobs in this sector, and will discuss the actions and policies that they see as the key for New Brunswick to capitalize on its traditional strength. Registration is free – link is here: https://lnkd.in/dYMGh2f.
Unfortunately I can’t attend because I am speaking at another event that day but I am sure it will be an interesting conversation.
What does manufacturing competitiveness mean?
It’s an issue I have been grappling with for a number of years ever since we starting seeing many of the big forest products firms exiting New Brunswick and blaming a ‘lack of competitiveness’ for their disinvestment. When a bunch of furniture manufacturers closed or moved they claimed a lack of workers at competitive labour costs. When Maple Leaf closed its 800 person plant in Moncton the issue was also burnished.
And, of course, a more recent example, when a Moncton-based plastic bottle manufacturing moved its production to Brampton because it could hire workers for $7/hour less than in Moncton (I was told).
Most people view the issue of manufacturing competitiveness through the lens of government because government does control or at least influence many if not most of the levers of competitiveness. Access to a manufacturing workforce is very much related to government policy. Are we promoting manufacturing jobs in high schools? Are we attracting immigrants to work in the manufacturing sector?
Many of a manufacturing firm’s operating costs are government controlled or influenced including energy, labour, taxes, etc.
Manufacturing-related infrastructure is very much government controlled or influenced from access to water to transportation and energy infrastructure.
Even manufacturing capital investment can be influenced by government through tax policy, economic development programs and general support for manufacturing.
Even public attitudes towards manufacturing can be influenced by government. Witness the large protests against a Chinese manufacturing plant proposed for Stratford, Ontario. To Be or Not to Be is very much the question and right now it looks like Not to Be is the likely outcome.
It is unlikely we will see large manufacturing subsidy programs again like the rail transportation subsides of the 1980s or the extra large electricity user subsidy in the 1990s. New Brunswick never really played seriously in the manufacturing subsidy game. I was part of a team trying to attract a Michelin plant to New Brunswick in the 1990s. The government scraped together an incentive package worth around $20 million (if memory serves) including federal government support. The firm ended up with a $100 million+ deal to put the plant in the southern US and got a ‘right to work’ state as a kicker.
So, manufacturing investment will have to come with minimal/token direct subsidies.
So what can government do?
I think government should deliberately commit to addressing the things it can address:
We won’t lose manufacturing plants to Ontario because those plants can more easily recruit workers than in New Brunswick. That is Alice in Wonderland upside down stuff. This should never happen. Like Maple Leaf in Brandon, Manitoba we will go to Mexico and help recruit workers if necessary.
We will encourage manufacturing entrepreneurs to locate in New Brunswick. Want to tinker on a food production startup idea? We will have a space and services for you. Want to get into the SMR supply chain? Have we got a deal for you. Have a manufacturing concept but are unsure of some of the mechanics? Pick up the phone and call Eric Cook at RPC.
We will make manufacturing ‘great again’ by promoting the making of things as a New Brunswick value – “Made in New Brunswick”. We won’t look down our noses on manufacturing.
We will have a competitive tax regime to encourage manufacturing investment and productivity.
And as for other government-influenced costs, we will keep manufacturing front and centre in our minds when policies are proposed.
From my time in government, there are MECs (Memorandums to Executive Council) that go to Cabinet and increasingly those MECs require that all policies have a gender, environment, First Nations and other targeted impacts review before Cabinet will made a decision. How about an impact on the manufacturing sector? How will policy x impact our manufacturers? Now that would be an interesting experiment.
In the end I think there is a future for manufacturing in New Brunswick. We have lots of land and resources. We have good highway infrastructure. We have uncongested urban centres.
Working on the competitive environment is a good step.