Industrial manufacturing remains an important part of the Canadian economy, despite facing strong headwinds created by the rise of lower-cost manufacturers in developing economies. This fierce competition has diminished the size of the Canadian manufacturing sector, but at the same time strengthened the sector as the remaining enterprises fight to remain competitive. Ontario and Québec remain the key manufacturing provinces with respect to automotive and aerospace production while wood products, extraction equipment and agricultural machinery form the bulk of production in the Prairies and in the West.
Canadian manufacturers establish and maintain their competitiveness through innovation, high value-add and efficiency. New technologies are important for the Canadian economy, and are reshaping the manufacturing sector. The so-called Industry 4.0 era is here and the race to succeed is on. This new era is defined by the use of digital technologies to make manufacturing more agile and efficient. This is achieved through increased automation enabled by smart technologies such as Internet of Things (IoT) and Artificial Intelligence (AI). The transformation extends well beyond the shop floor; it impacts the IT infrastructure (along with the ever-growing use of data to drive better decision-making), company personnel and relationships with suppliers and customers. Many manufacturers chose to outsource certain processes to offshore partners, decreasing cost but introducing logistic and contractual challenges.
Those manufacturers that successfully overcome these challenges and deliver their product to the market often have to find their customers outside of Canada. Canada’s relatively small population makes exports necessary — and manufactured goods are a key Canadian export, with the United States remaining as Canada’s key destination. This traditional partnership can present new challenges, however. New regulations in the areas of taxation or financing can put additional pressure on your company while making companies south of the border more competitive. Trade disputes including “buy local” campaigns exacerbate uncertainty and create difficulty for export-oriented producers.
The impact of COVID-19 on the manufacturing sector has been both positive and negative. Many companies suffered shocks to their supply chain, curtailing their ability to source, produce and distribute product. Some were able to leverage their core offerings, for example chemical manufacturers, to produce goods that spiked in demand. Others re-tooled their facilities to respond to changes in demand and general market volatility.
How we can help
Osler draws on our national platform of experts to help you navigate the many issues that impact the manufacturing sector, including the complexities of technological change, intellectual property, supply chain resilience, the labour market and regulations.
We have advised manufacturers of all sizes on the most critical business issues they have faced. We have assisted them with complex transactions, restructuring, trade regulation and cross-border issues. We can help you realize your business objectives, from improving your internal operations and governance to helping you acquire desirable assets to grow your business.