Canada's Manufacturing Sector Faces Severe Drop In Job Counts And Low Investments

By @Shayani92 on
IN PHOTO: Motorized mannequins hold signs that read "Hire Me" in Toronto May 23, 2014. Canada's economy unexpectedly shed 28,900 jobs in April, mainly due to steep declines in full-time employment and in the private sector, Statistics Canada data indicated earlier this month. REUTERS/Mark Blinch

Canada’s manufacturing industry has run out of jobs, CBC new reported. The news came right after the government announced news of rebound in Canada’s manufacturing industry. According to a report published on February 4, the industry also suffers from weak investment in equipment.

An 18-page document filed by a senior bureaucrat Philip Jennings said that a slump in exchange rate and the number of establishment points have damaged the manufacturing capacity. It also mentioned about the low investments made by the manufacturers in machinery and equipment that has in turn proved to be threatening productivity growth in the near future. According to the report published, although the industry seem to have rebounded since 2008 recession yet there hasn’t been any stable recovery in case of manufacturing jobs which remained steady at 1.7 million.

Last year, Industry Minister James Moore told a House of Commons committee about the future growth that would bring about rebound in sales but his analysis has been contradictory with the present situation. A future election and a severe drop in the country’s oil prices have pushed the government to adopt and reform its economic policies so as to prosper the manufacturing sector.

'NDP industry critic Peggy Nash warned about a permanent loss of manufacturing capacity. However, the recent budget has proposed a tax break for the industry that would allow firms to cancel their investment in equipment guaranteed for a period of 10 years instead of two years. The government has also made plans to invest in auto sector alongside the aerospace industry. However, with all the investment plans, the net loss of manufacturing jobs since 2004 still remain as high as 97,000 in Quebec and 212,000 in Ontario, reported CBC.

Michael Holden, an economist in Calgary with the Canadian Manufacturers and Exporters, called the report to be “pessimistic” and discouraging. He blamed the weak investments and low dollar valuation for the present crisis in the sector and pointed out that the country would fail to compete on labour costs with countries like Vietnam or China.

He expressed his appreciation for the Conservative government for introducing the 10 year capital cost tax break and insisted on lowering the Canadian dollar as it would increase manufacturing exports and likely to generate more revenue to match the high cost involved during the imports of the equipment. Meanwhile, Jake Enwright, a spokesman for Moore ensured that free trade deals with South Korea and Europe would attract almost 900 million customers.

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