Canadian manufacturers have consistently been leaders in research pursuits and discoveries for elevated products and technologies. Manufacturing is an abundantly diverse and innovative sector, relying on information technologies, automation systems, materials science, nanotechnology and biotechnology, and many more technologies.

Today’s manufacturing requires constant innovation to implement new ideas and incorporate the latest production processes. As a consequence of the highly competitive nature of the global economy and the increasingly complicated supply chains, the significance of innovation will only continue to become more important.

Canada’s manufacturing industry has ample opportunity for growth in Canada’s economic future. The advancements in our world mean that novel technologies are opening new markets for goods and expanding the routes in which goods are produced. The success of the industry will depend on innovation through encouraging industrial clusters that cultivate skills, technology, and knowledge. Given this growth, manufacturers act as magnets for new investments and young people to join the workforce.

1: Manufacturing in Canada by the Years

1999: Manufacturing accounted for approximately 19% of Canada’s GDP and 1.9 million jobs.

2001: Most recent General Agreement on Tariffs and Trade (GATT) negotiation, a multilateral agreement signed by 85 nations and 30 provisional signees which calls for the elimination of discriminatory treatment in international commerce in order to maximize world sources.

2001: Manufacturing accounts for 64% of SR&ED Tax Credits in Canada.

2004-2008: In light of the recession, one in seven manufacturing jobs disappeared. In response, Canadian manufacturers focused on production for domestic markets.

2007: Compositional shift towards durables and away from non-durables. Production volume of durable goods accordingly increased.

2010: Manufacturing sales increased 8.9% to $529.8 billion in 2010, despite the decline of 17.8% in 2009 following the recession. This was the single largest single-year advance since 2000.

2016: Federal government committed $180 billion in infrastructure spending from 2016 until 2028, with focus on national manufacturing strategy.

2017: BDC survey of 1,000 entrepreneurs found that 36% partly implemented digitized production, with 17% in the planning phase and 41% not having done so. Those who had adopted digital methods observed increased productivity, reduced costs and improved product quality.

2018: Motor vehicle assembly plants within Canada generated 2.04 million vehicles, resulting in $60.7 billion in sales.

2: Manufacturing in Canada by the Numbers

The manufacturing sector represents a cornerstone of the modern Canadian economy. Manufacturing represents more than 10% of Canada’s total GDP, and accounts for roughly $174 billion of our overall GDP. Even greater than this, exportation conducted by manufacturers is greater than $354 billion per year, comprising 68% of all of Canada’s merchandise exports. Overall, these numbers add up to 1.7 million full-time jobs across the country. Whereas the sector continues to modernize itself, manufacturers will continue to rely on a diverse workforce made up of designers, researchers, programmers, engineers, technicians, and tradespeople. The manufacturing sector is anticipated to grow exponentially until at least 2026.

  • In 2016, manufacturing was responsible for 32%, specifically $6.6 billion, of all business enterprise research and development investments
  • In 2016 just short of half of what Canadian manufacturers sold was exported ($354 billion), with over three-quarters to the U.S.
  • Manufacturers export more than $354 billion of goods each year, representing greater than half of all products manufactured in Canada
  • Auto manufacturing is Ontario’s top export at 21.6% of all exports (2019)

Research & Development Efforts

Based on anticipated growth, companies are exploring methods to streamline manufacturing and distribution processes. Innovation is central to maintaining the validity of manufacturing within today’s market, with technology-related spending increases occurring across our economy as more and more firms implement Industry 4.0 solutions for enhanced production and services.

Industry 4.0 has the potential to boost productivity, reduce costs, and improve product quality. The core innovation lies in monitoring and regulating machinery and equipment in system integration, artificial intelligence (AI) sensors, robotics, machine vision and automation. These advancements have far-reaching effects on Canadian manufacturing sectors, including aerospace, automotive, agriculture, and pharmaceuticals. As technologies continue to advance step by step, Canadian businesses have time to adjust – but shouldn’t wait if they want to be ahead of the curve.

Below are some notable examples of Canadian companies developing innovative solutions for the manufacturing sector:

Eigen Innovations, based in Fredericton, uses artificial intelligence and predictive analytics to improve manufacturing efficiency. Their technology also assesses the impact of new material introductions, preventing unnecessary costs.

LaPlace Robotics in Ontario has developed a compact robot platform to automate complex handling applications through its unique vision system.

Worximity helps manufacturers monitor real-time production through their sensors developed to collect data from any type or equipment or machine. Manufacturers in any industry can use the data to impact production efficiency by tracking labour, production speed and other KPIs in real-time.

Paradigm Shift in Manufacturing

Canada’s manufacturing industry shifted following the 2008 recession, with more recent changes resulting from COVID-19. The reliance on the workforce and complicated supply chains has resulted in limitations within production, and in certain instances closures. Despite these obstacles, companies have numerous opportunities to re-invent and innovate their production methods. These include process improvements, improved supply chain management, and investments in information technology and automation. Scientific Research and Experimental Development, and other government incentives, offer routes for manufacturers to adapt and keep on top of current and any future challenges. SR&ED and other funding have become significant pillars in maintaining the viability and well-being of manufacturing.

3: Government Funding for Canadian companies

Some of the most valuable government funding programs are specifically catered to supporting Canadian manufacturers. These government funding opportunities are a proactive means to offset a portion of all strategic project costs through grants, tax credits, and loans.

In 2017, the government of Canada implemented the Superclusters initiative and included Advanced Manufacturing as one of the key areas of targeted growth for the future of Canadian technology. The Next Generation Supercluster (NGen) was created as a hub to facilitate growth in automation, robotics and digitization technologies. The program offers funding in the form of grants for collaborative projects that seek to enhance the manufacturing sector through the development of advanced manufacturing technologies.

The implementation of advanced manufacturing methods may require an upskilling of the workforce to work with the new processes. In these cases, the Canada Job Grant (CJG) can be leveraged to provide support with third-party training costs for both new and existing employees. The program will provide non-repayable funding for 50-100% of training costs for companies across Canada. 

Other forms of various non-dilutive funding programs:

For more information on funding programs to accelerate your company’s innovation and growth efforts, contact us to speak with one of our funding advisors.