Will a lack of skilled workers kill manufacturing in Canada?

How long can manufacturing survive without a deep skilled labour pool?

In a survival situation, it’s important to know the “rule of three.” While the rule is situationally based, it essentially states that you can survive for three minutes without air, three days without water, and three weeks without food.

It begs the question: How long can manufacturing survive without a deep skilled labour pool.

Without one, Canadian manufacturers may lose the ability to compete globally. Being absent from the global supply chain, for instance in aerospace or automotive production, has damaging effects locally as well. It affects our integrated supply chain from international OEMs down to custom job shops.

For an industry already living in an increasingly complex and competitive landscape, the inability to fill vacant jobs is a nightmare. It’s like tossing someone an anchor instead of a lifeline.

In May, a national survey by Canadian Manufacturers & Exporters (CME) showed that one-third of Canadian manufacturers identified the skilled labour shortage as one of the biggest barriers to technology adoption, because they simply can’t find workers with the appropriate skills for new technology.

This includes some of the largest manufacturers in the country. And, if it’s bad at the top, it’s even worse for small and medium-sized shops, which often lack the financial resources and technical expertise required by these emerging technologies.

“More than 90 per cent of Canadian manufacturers are small businesses and play a crucial role in the supply chain of larger companies,” said Dennis Darby, CME president/CEO. “We need more targeted government support for these companies to help accelerate technology adoption in our manufacturing sector or risk our economic competitiveness and standard of living.”

CME has its own rule of three for the federal government to speed up technology adoption:

1. Introduce a national 10 per cent investment tax credit that is matched by all provinces to help reduce costs and de-risk investment.
2. Support employer-led training through a 50 per cent tax credit to offset the costs of employee training.
3. Fund technology demonstration tours and site visits to help companies understand the opportunities with the new technologies.

Technology adoption, or the lack thereof, is Canada’s canary in the coal mine. It’s an indicator that something bad is about to happen.

Without skilled workers, there will be no advanced technology adoption or digital transformation. Industry-altering technologies like enterprise resource planning (ERP) systems, cloud computing, robotics, and manufacturing cybersecurity systems will be purchased and installed somewhere else.

The purchase orders and work will follow.