The Commerce Times

What to expect next from the “Black Box”

On Nov. 10, the Ted Rogers School of Management hosted the third in a series of panels discussing issues facing the Canadian economy.  Esteemed scholars, high-profile executives and distinguished politicians gathered to discuss revitalizing the Canadian manufacturing sector.

Sheldon Levy, president of Ryerson University, and Ken Jones, Dean of the Ted Rogers School of Management who made the welcome address; the were followed by Buzz Hargrove, moderator for the event, presented some startling facts about manufacturing.

“Direct manufacturing accounts for 16 per cent of economic activity in Canada,” Hargrove said. “When spinoffs are included, the importance of manufacturing gets amplified.  For every dollar of manufacturing, the spin-offs are $3.”

His statistics painted a grim picture.  “Since November 2002, 573,000 manufacturing jobs have been lost in Canada, with 337,000 of those jobs lost in Ontario alone.”

The first of two panels presented was titled “Innovation and Entrepreneurship in Manufacturing.”  The panelists for this discussion were Green Party leader Elizabeth May, Jayson Myers, President and CEO of the Canadian Manufacturers and Exporters, and Jim Stanford, economist for the Canadian Auto Workers Union.

Speaking first, Elizabeth May, introduced issues such as Canada lacking a national manufacturing policy, Canada’s current need to focus on increasing productivity, and Canada’s inability to use economic stimulus to advance green energy.

“Since November 2002, 573,000 manufacturing jobs have been lost in Canada, with 337,000 of those jobs lost in Ontario alone.”

“We need to skate to where the puck is going,” she said, quoting Wayne Gretzky.

May believes that Canada’s dependence on extracting oil from the Athabasca Tar Sands has not necessarily benefitted Canada, especially the ability to export manufactured goods.  “This is dangerous, what Canada is doing.  We rely on the expansion of our tar sands, and the increase our exporting of oil to the US is causing the rise of our Canadian dollar.”

Myers, whose organization assists small to medium sized manufacturers competitively export their finished goods, emphasized the importance for manufacturers to become more value-added, innovate, specialize and ultimately improve productivity.

Stanford discussed the myths surrounding manufacturing, including it being a “smokestack” industry and a “post-industrial economy,” when manufacturing is probably the most capital and knowledge intensive industry and very “e-connective.”

The Buy-American policies were also a hotly-debated issue.

“I think the cure would be worse than the disease.  What they are pushing for now is for a deepening of NAFTA in a way to respond to this problem,” said Stanford.  “There may be a deal in the works right now where the Americans may give us an exemption in return for signing WTO agreements which would bind global and provincial governments from not doing that kind of thing.”

The second panel, including John Galt, President and CEO of Husky Injection Molding Systems, Gordon Nixon, President and CEO of Royal Bank of Canada and the Hon. Sandra Pupatello, Ontario Minister of Economic Development and Trade, focused on global opportunities for Canadian manufacturing firms.

Pupatello entertained the audience with her “Black Box” containing items manufactured in Ontario including an electronic eye, cutlery comprised only of wood feedstock and ball bearings used in every jet engine around the world.

Before Nixon was able to speak, members of the Rainforest Action Network protested RBC’s investments in the Athabasca Tar Sands.  “RBC has no business talking at a conference about manufacturing,” shouted one of the protesters.

“That’s the great thing about living in a democracy,” Hargrove said, referring to the protest.

Nixon presented the financial aspects regarding the strength of Canada’s banking system, and the abundance of available  credit waiting for small and medium sized enterprises when they are ready to rebound.

“We know we can’t compete with cheap labour,” said Nixon.  “We have to compete by enhancing productivity.”
John Galt shared how they were able to buck the current trend.  “Passion, and the inspiration to build something great,” he said.  “Those have been very important parts as to why Husky has been so successful.”  He added that Husky been able to thrive during the recession, while their competition have fallen one by one.

Sandra Pupatello gave the closing remarks on behalf of the premier, the Honourable Dalton McGuinty, who was originally scheduled to attend.

“The forum allows you to delve deeper than just the top of the line of the speech,” she said.

“In manufacturing, Ontario is only rivaled by California.  Our world got a whole lot smaller in this last recession.  We knew it was getting smaller, but it really hit us.  And we get it;  our competition is far broader than that.”

Pupatello listed achievements that Ontario’s manufacturing sector has recently achieved, however did acknowledge that more can be done.

“We’re not out of our challenge yet,” she said in closing.  “If anything, take everything we learned and put it into application and government policy and how aggressive we will be.  Take the message of who we are to the world, because when we do that we’ll continue to win.”