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Canadian manufacturing industry risks ‘falling behind on world stage,’ CME says

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A new CME survey says that one-third of manufacturers identified a shortage of skilled workers as one of their biggest barriers to technology adoption.

A shortage of skilled workers is threatening Canadian manufacturers’ ability to adopt necessary technologies to scale and compete globally, a recent national survey conducted by Canadian Manufacturers & Exporters (CME) suggests.

According to Ottawa-based CME, manufacturers’ efforts to adopt technology to improve profits and navigate an increasingly complex and competitive business landscape are being thwarted by ongoing skills shortages, high purchase costs and the ability to finance these new innovations.

In the survey, one-third of manufacturers identified a shortage of skilled workers as one of their biggest barriers to technology adoption, saying they can’t find enough workers with the appropriate skills to take advantage of the technologies.

The survey, which was conducted between March 15 and April 17, 2023, also shows that two out of five companies have not started or are in the early stages of digital transformation. According to CME, if Canada’s manufacturing sector is to remain globally competitive, more manufacturers will need to embrace digital transformation at a faster pace.


The CME survey also reveals that one out of four companies is not currently using any of the nine digital transformation software solutions available on the market, such as enterprise resource planning (ERP) systems. It shows that 10 per cent have yet to adopt any of the nine advanced manufacturing technologies frequently associated with Industry 4.0, including cloud computing, robotics and cybersecurity.

In addition, the survey found that small manufacturers face greater barriers to technology adoption than their larger counterparts. Compared to medium-sized and large enterprises, companies with fewer than 100 employees reported lower confidence in their knowledge of advanced technologies and greater difficulty obtaining financing for digital transformation.

“More than 90 per cent of Canadian manufacturers are small businesses and play a crucial role in the supply chain of larger companies,” said CME president and CEO Dennis Darby. “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 recommends three specific fronts for government to act on 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 investments.
  2. Support employer-led training through a 50 per cent tax credit to offset half of the costs of employee training.
  3. Fund technology demonstration tours and site visits to help companies understand the opportunities with the new technologies.

“There’s no question that technology adoption is critical to meeting the challenges of intensifying global competition and an aging population, but Canadian manufacturers face many barriers that prevent them from taking full advantage of these solutions,” Darby said. “This needs to change or Canada risks falling further behind on the world stage.”

The full survey results are available here.


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