It is my pleasure to welcome you to Canadian Manufacturers & Exporters’ (CME) Alberta division. CME has been the voice of industry in Alberta for nearly a century and we continually search for ways to enhance our members’ competitiveness. Perhaps like no other time in our history, the association and its members have the opportunity to play a pivotal role in shaping Alberta’s future.
We work tirelessly to build a strong and robust manufacturing sector and export base in Alberta. By so doing, we help to diversify the provincial economy, ensure continued prosperity and help enhance Alberta’s standard of living. We work closely with industry and governments at all levels to create the right environment for economic success. By so doing, we work for the benefit all Albertans: our businesses, communities and government.
Manufacturing and exporting matter to Alberta. While the sector has been struggling in other provinces, Alberta’s manufacturing base has expanded considerably over the past decade. Sales from Alberta businesses have hit record levels for three years in a row, exceeding $79 billion last year. Today, manufacturing contributes over seven per cent of provincial GDP, directly employs 145,000 Albertans and pays more than $9 billion in salaries.
The impact of exports on the provincial economy is even greater. Exports also hit record levels in 2014 and have risen by nearly 73 per cent over the past five years. Exports account for one third of all economic activity in the province and support one in three jobs.
Although oil & gas and agriculture are the foundation of Alberta’s exports and its manufacturing base, they by no means represent the totality of manufacturing in the province. Our members produce a wide range of products and services – united by a common challenge: competing in a global marketplace.
Indeed, this competitiveness challenge is preventing Alberta from reaching its full potential. Productivity growth in Alberta has lagged that of the rest of Canada. Much of the export growth since 2009 was the result of higher volumes of crude oil shipments to the US – not from capturing or developing new market opportunities. On top of that, sales from domestic manufacturing have grown at only half the rate of manufacturing imports. In other words, despite the growth in Alberta’s manufacturing sector, we are losing domestic market share to our international competitors. The decline in commodity prices, and the markets that depend on them, mean that there will be even greater challenges ahead.
CME will help lead the diversification of Alberta’s economy over the next decade. We will do this not only by fostering an environment for investment in new manufacturing technologies, but also by building on Alberta’s competitive advantages in the resource, agriculture and infrastructure sectors. This includes greater participation in oil & gas and infrastructure supply chains, as well as increasing the amount of value-added processing of raw food and energy resources that takes place in Alberta. Greater investment in the manufacturing sector is essential to realize Alberta’s full potential.
With the right conditions in place, we see great things for Alberta. CME believes that Alberta has the potential to double manufacturing output, increase real business investment by 25 per cent, raise real GDP per hour by 1.3 per cent annually and expand non-US-bound exports by 75 per cent by 2020 (versus 2012).
To achieve those goals, we advocate for public policy measures focussed on two priority areas:
- Strengthening the competiveness of Alberta’s manufacturing sector, and;
- Strengthening market access for Alberta manufactured goods.
Our specific recommendations are the result of an extensive series of province-wide consultations in 2013, and can be found in our guiding report, Manufacturing Alberta’s Future.
Success requires real commitment and a focused effort by industry, government and all Albertans. Industry must do its part by focusing on innovation in products, processes and markets. Government policies that address high labour costs, skills shortages and the need to increase business investment in productivity-enhancing machinery and equipment are critical to ensuring a robust and dynamic manufacturing sector in Alberta.
CME looks forward to working with business stakeholders and governments to help the province’s manufacturers reach their full potential.
Chair, CME-Alberta Board of Directors
Tenaris Vice President of Institutional Relations