Progressive think-tank gears up to take on conservatives

Mark Kennedy / Postmedia 

For years, Ed Broadbent fought his battles on the front lines of Canadian politics as leader of the federal NDP.

These days, he’s taking his fight to a different plain — to the battle of ideas, of influence and of political relevance.

He is chair of a think-tank — the Broadbent Institute — that champions “progressive change,” trains activists and confronts some of the long-term issues political parties ignore.

He’s intent on countering the influence of Canadian think-tanks such as the Manning Centre for Building Democracy, established in 2005 by former Reform leader Preston Manning.

“Mr. Manning, from his point of view and from the conservative point of view, has done very well,” Broadbent said in an interview with the Ottawa Citizen.

“They have had an impact on the public debate. And it’s time we did some catch-up, frankly.

“Mr. Manning’s institute does it on the right and we want to do it on the left in Canada.”

Call it the battle of think-tanks. Left versus right. Broadbent versus Manning. Progressive versus conservative.

The two organizations have now become parallel incubators for ideas in Canadian politics, unrestrained by the formal partisan ties that can stifle debate among true believers within parties. Moreover, unlike most traditional think-tanks, both organizations offer training on how to achieve political change — all the way from community groups or city hall to provincial and federal politics.

This weekend in Ottawa, the Broadbent Institute, founded in 2011, will hold its first annual “progress summit.” About 600 people are expected to attend.

The conference will feature topics such as: income inequality; the federal government’s “attack” on the labour movement; the rights of indigenous peoples on natural resource development; and how businesses can build a “green economy.”

The institute believes in the merits of learning from “progressives” elsewhere in the world. Former Australian prime minister Julia Gillard will headline a list of speakers that includes a French politician describing the “rise of the right” in Europe, and a human rights “marketing director” based in Washington, D.C.

There will be a session on how to use Google and social media in campaigns, and on “lessons from winning progressive campaigns in the U.S. and Canada.”

The event is virtually a mirror image — with different policy leanings — of the annual Manning Centre conference, the most recent of which was in Ottawa in early March.

Chuck Strahl, a former Conservative MP who chairs the Manning Centre, said the country is well-served by having  parallel think-tanks because political parties are more focused on winning elections.

“The parties themselves are forced, if you will, to focus on what they do best and that leaves it open for other organizations like the Manning Centre and the Broadbent Institute to delve into some of the big issues. We don’t have to get elected to anything.”

Strahl said he welcomes the emergence of the Broadbent Institute.

“It’s not really a competitor; it’s a competitor for ideas. We’re not tilling the same soil here. We’re looking for people on the conservative end of the spectrum, but we both have the same sort of objective: to engage them in civil society.”

Broadbent said his institute faces a big challenge getting its message out because many of the country’s prominent think-tanks, such as the Fraser Institute and the C.D. Howe Institute, are predominantly conservative.

Broadbent’s institute is not a registered charity, nor does it plan to become one. It funds its operations through donations — often $5 or $20 from thousands of donors, says executive director Rick Smith — and will have a budget of over $1 million in the next year

There is a strong NDP tinge to the group; some key players have held prominent jobs in the party.

But the institute proclaims it is an “independent” and “non-partisan.” It has the support of Allan Gregg, once the Progressive Conservative party’s chief pollster, and John Laschinger, formerly campaign manager for many federal and provincial Progressive Conservatives.

Indeed, Smith said the institute appeals to a broad range of Canadians.

“On any given day, the vast majority of Canadians are untethered from any particular party affiliation. They’re open to good ideas and they’re looking for a good debate about the issues of the day. That’s is the kind of audience we’re trying to cater to and reach.”

Equal Voice to honour former Australian PM Julia Gillard as global champion

Broadbent Institute and Equal Voice to celebrate Australia’s first female Prime Minister

OTTAWA—Equal Voice and the Broadbent Institute will host a special event to celebrate Australia’s first female Prime Minister Julia Gillard this weekend. Ms. Gillard will offer remarks on her career in politics and Equal Voice, a national organization dedicated to the election of women in Canada, will name Ms. Gillard a Global Champion for Women in Politics.

WHO: Former Australian PM Julia Gillard; Equal Voice’s National Chair Raylene Lang-Dion; and the Broadbent Institute’s Kathleen Monk

WHAT: Remarks by Former Australian PM Julia Gillard, followed by a cocktail reception

DATE: Saturday, March 29, 2014

TIME: 6:15pm – 8pm

Delta Hotel, Penthouse
101 Lyon St N


For more information, please contact:

Nancy Peckford, Equal Voice (613) 292-7941
Denise Siele, Equal Voice (613) 276-3274
Kathleen Monk, Broadbent Institute (613) 296-2073

Broadbent Institute announces Leadership Fellows

Fellows to share expertise and experiences with budding leaders

OTTAWA—The Broadbent Institute today announced its first Leadership Fellows -- a talented and diverse group of 18 leaders from across Canada who will share their expertise and experiences with the next generation of Canadian leaders.

“Together, the Leadership Fellows will strengthen the Institute’s ability to support the growth of the progressive movement in Canada,” said Graham Mitchell, the Broadbent Institute’s Director of Training and Leadership.

The inaugural group of Leadership Fellows, part of the expansion of the Institute’s Training and Leadership Program, are:

  • Tzeporah Berman, strategic advisor for environmental organizations
  • Tsering Dolma, Community Outreach Coordinator of the Toronto Environmental Alliance.
  • Lois Corbett, environmental consultant
  • Judy Duncan, head organizer and Executive Director of ACORN Canada
  • Sara Ehrhardt, policy expert and public campaigner
  • Bob Gallagher, head of communications and political action for the United Steelworkers, LGBTQ activist
  • Raymond Guardia, campaign manager and current Deputy Chief of Staff for Projet Montréal
  • Jennifer Hollett, award-winning broadcast journalist and digital expert
  • John Laschinger, veteran campaign manager and author
  • Brad Lavigne, consultant, media commentator, author and former campaign manager
  • Allan Gregg, leading research professional and social commentator
  • Trevor McKenzie-Smith, campaigner and electoral geographer
  • Gillian McEachern, environmental campaigner
  • Kevin Millsip, co-founder and director of Next Up
  • Tracey Mitchell, community-based facilitator, writer and activist  
  • Jason Mogus, digital strategist and campaigner
  • Bob Penner, pollster and leading research professional
  • Robin Sears, consultant, media commentator and former campaign manager

"They have experience as campaign managers, strategists, tacticians, communicators, innovators, pollsters, public servants, and much more," added Mitchell. "Their work on a variety of issues has made this country a better place, so we’re excited about sharing their expertise with a new generation of campaigners.”

The Broadbent Institute's first Leadership Fellows are also joined by five new Policy Fellows, who join an already impressive roster of leading academics and policy experts that help inform the Institute’s research and policy agenda.

The biographies of Leadership Fellows are available online at The full list of Policy Fellows is available at

From March 28-30 in Ottawa, the Broadbent Institute is holding its first annual Progress Summit. Learn more at The Institute is also holding a pre-summit Training and Leadership session in Ottawa with Mitch Stewart, founding partner of 270 Strategies and Battleground States Director for the Obama for America campaign in the 2012 presidential general election.

For more information, please contact:
Mike Fancie, Broadbent Institute
mfancie[at] broadbentinstitute [dot] ca or 613-866-3606

Progressives gather in Ottawa to discuss economy, strategy

OTTAWA—Leading thinkers in Canada will be meeting in Ottawa this week for a summit where they will map a path to a fair, sustainable and prosperous Canadian economy. The Broadbent Institute’s first annual Progress Summit will be held Friday, March 28 to Sunday, March 30 at the Delta Ottawa.

Speakers include:

  • Julia Gillard, former Prime Minister of Australia Mariana Mazzucato, author of "The Entrepreneurial State" 
  • Anastasia Khoo, Marketing Director, Human Rights Campaign 
  • Axelle Lemaire, Quebec-born French National Assemblywoman for Northern Europe 
  • Ed Broadbent, Chair, Broadbent Institute 
  • Don Drummond, professor at Queen’s University and Canadian economist 
  • Alex Himelfarb, former Privy Council Clerk 
  • Mitch Stewart, 270 Strategies Founding Partner and Battleground States Director for the 2012 Obama for America campaign 

Media are encouraged to accredit in advance:

A full schedule of speakers is available online:

For more information and to book interviews in advance, please contact:

Caitlin Kealey 
ckealey [at] broadbentinstitute [dot] ca  or 613-818-7956

Work in progress: millennial anxiety reaches across generations

Jessica Barrett / Calgary Herald

When I first conceived of my year-long project on the working world for the Calgary Herald’s Michelle Lang Fellowship, I have to admit, most of my proposal was based on a hunch. Through straw polls, coffee banter with friends and colleagues, discussions with my own parents and, of course, my own experience in the job market, I was fairly certain I wasn’t the only one gazing at an uncertain economic future with some apprehension.

To back up my pitch, I assembled a smattering of news stories pointing out the dismal projections for younger workers, growing income inequality, boomers delaying retirement and the like.

But when it came to my thesis – namely that the working world is changing and we’re not feeling all that great about it – there was very little evidence out there to prove that I wasn’t just butting up against the walls of my own little bubble.

Turns out the folks at the Broadbent Institute, an Ottawa-based think tank, felt the same. In response to the same dinnertime conversation I was picking up on, they decided to commission a poll to determine just how widespread concern over job prospects and economic futures for younger workers is.

The results, published today, show anxiety over the changing face of work, and all the social challenges it implies, runs deep across the generations.

The poll surveyed 1,064 boomers aged 50-65 and 983 millennials aged 20-30 about their experiences in the work force and sheds some much-needed light on how Canadians are feeling about the economy. The figures were weighted to reflect census data on population age, gender, education and region.

So, what do the numbers say? Many boomers and millennials are anxious about the younger generation’s job prospects, homeownership potential and ability to fund social programs through taxes.

Interestingly, boomer parents seem to be more pessimistic about their children’s future than millennials are about their own prospects. Nearly half of boomers, 49 per cent, feel their kids are facing a poorer future than they had, while 34 per cent of millennials feel they are worse off than their parents.

But at the same time, millennials know they are facing a working life with fewer guarantees. More than half anticipated a career where contract work played a role, compared to 14 per cent of boomers who said they faced the same instability in their own careers. Meanwhile, only a third of millennials were confident they’d own their homes at retirement, compared to more than half of boomers, and one in five millennials say they don’t know anyone with an employer-funded pension.

Rick Smith, executive director of the Broadbent Institute, said he wasn’t surprised to find a high level of angst across age cohorts, but he didn’t anticipate seeing so much agreement between the generations on possible causes of economic instability. A significant majority of both generations expressed a high level of distrust for corporations, he noted, with both blaming irresponsible corporate behaviour for bringing on the 2008 financial crisis.

“Our starting point was very similar to yours: is this our imagination or not?” Smith said in an interview Monday.

“If you were to rank likely topics of dinner-time conversation in Canada these days, youth unemployment is high on that list. These numbers bear out that anecdotal experience.”

Smith said the results of the poll will be used to inform policy recommendations coming out of a summit the institute is holding later this month in Ottawa.

Here are some other highlights from the survey (which you can read here). I’m interested to know if you agree, send me an email or leave a comment below and let me know how you’re feeling about your work prospects.

  • Just over half, 52 per cent, of millennials expect contract work to make up a significant part of their working lives, either alone or in conjunction with permanent jobs. In contrast, 14 per cent of boomers said their work lives relied on contract work;
  • 39 per cent of millennials anticipate a career comprised of permanent jobs, compared to 66 per cent of boomers who experienced permanent employment;
  • Millennials with university degrees were more likely to anticipate a career encompassing contract work than those with high school or college education;
  • 70 per cent of millennials and 78 per cent of boomers cite irresponsible business behaviour as the cause of the 2008 recession;
  • 60 per cent of millennials anticipate the gap between rich and poor to grow during their lifetime;
  • 55 per cent of millennials and 59 per cent of boomers say declining enrolment in unions has made good jobs harder to find;
  • 48 per cent of millennials and 60 per cent of boomers say reduced corporate tax rates have not resulted in more investment in creating jobs in Canada.

The poll does not provide a margin of error because it is not a random, probability-based sample.


Parents, youth agree: the economic road ahead is rocky

Survey highlights millennials’ fears and boomers’ worries about precarious work

OTTAWA—In an innovative survey of both millennials and boomer parents, a poll asked two generations their thoughts about their economic future and the policies affecting it. Both young people in the workforce and their parents expressed deep unease about a future of precarious, low-benefit work. 

The poll, conducted by Abacus Data for the Broadbent Institute, shows only a minority in both groups believe the economic opportunities of young people will be better than the boomer generation. And a majority of millennials and boomers don’t trust corporations to create good jobs in Canada, even as governments enact policies businesses want.

“Without a change in direction, Canada won’t see one generation leaving things better for the next,” said Rick Smith, Executive Director of the Broadbent Institute. “Young people think income inequality will grow in their lifetime, while their parents worry about how the social programs they’ll need in retirement will be paid for.”

The poll’s key findings:

  • There are four times as many millennials who think they will face contract work than what baby boomers report they faced in their life.
  • Boomers are more likely to think their children will slip in economic class than are millennials when asked about their future economic status; and about half (49%) of boomers believe economic opportunities are worse for their children than when they were their children's age.
  • Only a small minority of millennials (21%) and boomers (15%) believe corporations will work harder to make sure good jobs are created in Canada; large majorities in both groups believe corporations will concentrate more on their profits, even if good jobs aren’t created.
  • Millennials are three times as likely to think income inequality will grow than narrow in their lifetime. 
  • A majority of boomers fear their children’s generation won’t be able to pay for social programs they will need in retirement.

"These findings show people are skeptical that corporations will create good jobs in Canada. They believe most people will be worse off if the government continues to withdraw and turns to individuals to make up the difference,” said Smith. “The survey is a wake-up call about the need for a new deal for today’s youth.”

The Abacus Data survey surveyed 983 Canadians aged 20-30 in the job market — millennials — and 1,064 people aged 50-65 — baby boomers — with at least one child aged 20 or older. The online survey was completed from February 6-10, 2014.

The full report is available at

From March 28-30 in Ottawa, the Broadbent Institute will hold its first annual Progress Summit  a high-profile event that will bring together an exciting group of policy experts from across Canada and around the world. The issue of youth unemployment will be top of the agenda for this event. Learn more at


For more information, please contact:

Mike Fancie, Broadbent Institute
613-866-3606 or mfancie [at ] broadbentinstitute [dot] ca

Millennials, boomers fret about tough economic future

Joe Friesen / Globe & Mail

The perception of a growing generational divide seems to be taking hold among millennials and their baby boomer parents, as both groups now tend to believe that the economic future looks bleak for the younger generation, a new survey shows.

The survey, which was commissioned by the Broadbent Institute, found that millennials fear their working lives will be governed by precarious, short-term arrangements and that the gulf between rich and poor will grow. Their parents, meanwhile, worry that the younger generation will not produce enough income to support the social programs they’re counting on in old age.

“Parents across this country are fretting about the economic prospects of their kids. They’re worried their kids aren’t going to have the same economic opportunities as they did,” said Rick Smith, executive director of the Broadbent Institute, a left-wing think tank. “What really leaps out at me here is there’s a very high degree of angst.”

A feeling of anxiety about the economic prospects of a younger generation is not uncommon historically. What’s not clear is whether today’s fears are justified. Youth unemployment is at 13.6 per cent, unchanged over the last year and down from the peak of a recession that continues to send ripples through the global economy. This is also a period of significant technological change and it’s unclear what impact that will have over the long term. What’s clear is that a sense of pessimism, justified or not, is gaining momentum.

Baby boomers are more likely to say that their children face worse economic times than they did as young people. Just less than 50 per cent of the boomers surveyed said their children’s economic opportunities are worse than their own at that age, compared with 40 per cent that said they were better and 12 per cent that said they were the same, according to the online survey by Abacus. More than 55 per cent of boomers said they worried the younger generation won’t support social programs through taxes.

Millennials are expecting a different kind of working world from the one their parents entered. They expect to work a mixture of permanent and temporary jobs, compared with the more stable arrangements their parents had. They say lower rates of unionization will make good jobs harder to find and are more likely to say they don’t know anyone with an employer-provided pension, the survey said. Sixty per cent say the gap between rich and poor will increase over their lifetime, and only 16 per cent believe it will shrink.

Frances Woolley, an economist at Carleton University, said there’s no question today’s labour market is more unequal. This is a “winner take all” society, as some call it, where the greatest income gains go to those at the top of the spectrum and some, particularly those without a university education, will face a difficult job market. But one thing to consider is that the baby boomers had the good fortune to be born at the right time, an era of peace and prosperity, Prof. Woolley said.

“The older generation has had such a blessed life,” Prof. Woolley said. “Some generations are born in better times than others. That’s just the way it is.”

Matthew Cuthbert is a 27-year-old graduate of the University of Toronto. He has experienced the millennial’s anxiety. He has nearly $50,000 in student and credit-card debt and works at a community centre in customer service, earning $31,000 a year. He and many of his friends are the precariat, he said, a new class of precarious worker. It’s not what he was expecting, but after seven months unemployed, he’s grateful for the work.

“It’s frustrating to watch this break down. When I started school there was so much more optimism around the economy,” he said. “It’s far from the ideal situation that any of us anticipated.“

Younger Canadians feel angst about their financial prospects

Don Curren / Wall Street Journal

Canadians in the millennial and boomer generations disagree about much, but hold one thing in common: they’re deeply anxious about the economic future of young Canadians.

That was the key finding of a survey of Canadians between 20 and 30–the “millennial” generation–who are in the work force, and boomers, or those aged between 50 and 65, by the left-leaning Broadbent Institute.

“It puts [some numbers], for the first time, to the fact there’s deep angst, among both millennials and their parents, about the reduced economic opportunities available to young people, today,”Rick Smith, executive direction of the institute, told Canada Real Time.

“The scale of the angst certainly took us by surprise,” he said. “The strength of feeling here is really quite astonishing.”

The online survey, conducted last month, found that 41% of the millennials expect their working lives to comprise a mix of contract work and permanent jobs, with 39% anticipating a succession of permanent jobs.

That contrasts markedly with the experience of the boomers, 66% of whom reported working lives consisting of a string of permanent jobs and only 10% of whom experienced the combination of contracts and permanent positions expected by the millennials. 

A near majority of 49% of the boomers said things are worse for their children today, while 40% believe their kids’ economic opportunities are better than theirs were when they were the same age. More millennials—56%–said they expected their opportunities to be the same as or worse than their parents’.

On the housing front, more than half of boomers are certain they’ll own their home at retirement, but only a third of millennials are as confident.

Mr. Smith said the relative pessimism about the prospects of working Canadians, both among millennials and boomers, reflects their “lived experiences” in the last few years.

The survey found that 92% of boomers know someone with a workplace pension, with 51% of them knowing some or many. That compares with only 30% of millennials who know at least some people who have a workplace pension, and 20% knowing no one with such a benefit.

A big majority of both millennials and boomers agreed free-trade agreements have made Canadian businesses more profitable by making it cheaper to make things in other countries. But a majority of these same respondents also said trade agreements have cost Canadians jobs and opportunities.

Overall, the survey pointed to concern about the prospects of younger Canadians now, but also into the future, Mr. Smith said.

“This concern is not only for economic prospects of youth currently, it’s also a realization of economic prospects for youth in the future are likely to be dimmed,” he said.

“People don’t view this as a blip. They’re not anticipating that things are going to bounce back, any time soon,” Mr. Smith said.

Fair Elections Act attacks participation and debate

For many months the Conservative government has blatantly taken away by fiat the right to strike of union members within federal jurisdiction. They are now threatening to shut down environmental charities that are talking about climate change. And they are ramming through Parliament changes to the elections act that will almost certainly mean that many thousands of Canadians will not be able to vote.

Taken together these actions restrict freedom of association, limit freedom of speech and curtail a citizen’s right to vote. In short, there is a steady chipping away at the underpinnings of democracy.

Inspired by the voter suppression tactics used by the Republicans to disenfranchise marginalized groups in the U.S., the new election law would make it harder for certain groups to vote. The law would end the ability to “vouch” for the bona fides of a neighbour, a tool that allowed 120,000 voters — disproportionately aboriginal, youth and seniors — to cast ballots in the last election.

Conservatives claim that vouching allows for widespread fraud, a charge that experts deny.

The move is part of a broader sweep of changes that also serves to suppress the vote. For example, the new law will remove the ability of electors to use voter identification cards. Elections Canada had only in the last few years piloted the use of the cards to make it easier to cast a ballot at polling sites serving seniors’ residences, long-term care facilities, aboriginal reserves and on-campus student residences. The conclusion of this pilot project was that the “initiative made the voter identification process run more smoothly and reduced the need to ask the responsible authorities for letters of attestation of residence.”

In other words, voter identification cards had been successful in enfranchising these groups. Conservative MP Brad Butt, a member of the committee dealing with this measure, has been compelled to retract a completely fabricated story he had told in the House about this so-called fraud. Despite his apparent breach of parliamentary privilege, the Conservatives rejected an opposition bid to have a House committee look into Butt’s false claims that he saw voter identification cards stolen from recycling boxes to commit fraud.

Just as anti-democratic are changes that amount to a massive clawback to Elections Canada’s outreach mandate. This would severely restrict the agency’s public education and information programs, essentially prohibiting Elections Canada from encouraging people to vote. Gone would be its ability to support programs in our schools, like Student Vote’s mock elections, or the outreach work in aboriginal communities. To believe it’s accidental that these groups normally prefer the opposition parties is to believe in the tooth fairy.

The government’s bill also denies Elections Canada the kinds of powers it needs to investigate serious electoral wrongdoing, such as the robocalls fraud perpetrated by Conservatives in 2011 — the most important new powers requested by Elections Canada.

It is fitting, then, that the new law is being rammed through Parliament. Once more, Harper is using closure — a way to end debate early — to prevent people asking, for example, why school programs that teach kids how to vote are so bad. Why let MPs actually debate democracy when it’s not valuable enough to educate children about? The government has also voted down an opposition motion to have public hearings on a bill that will make such fundamental changes in our electoral system.

But such is the new normal in Ottawa, where sweeping bills that change dozens of laws are rammed through without debate. The government is also vowing to silence environmental charities because they engage in “political” activity. In Canada and other democracies such activist charities are widely seen as core institutions in a democratic civil society.

Canadian charities helped stop acid rain and smoking in restaurants. Their advocacy helped bring about mandatory seatbelts and led to tough drunk driving laws. Charities participating in public debate are helping the whole world understand how environmental degradation is threatening the planet.

While shutting down environmental charities would make it harder for Canadian voices to join others to tell the world what’s happening to the planet, it is also the case that the U.S. and Europe see the Canadian government’s indifference to the environment as a negative in reaching major decisions on trade in oil.

Having spent more than two decades in the House of Commons, I can think of no prime minister who has been so focused on undermining electoral participation and public debate.

We have a tradition of Conservatives, New Democrats and Liberals respecting everyone’s right to have a say. Past governments have avoided turning democratic process into a tool for one party’s advantage. Changes in electoral processes were always based on all-party consensus.

That Harper derides such all-party consensus is, sadly, no surprise. That his robotic backbench will unquestioningly obey is not news either. Except now, the victims of his disregard for debate aren’t only the people we elect. It’s those doing the electing as well.

Photo: midnightglory. Used under a Creative Commons BY-SA 2.0 licence.

The prescription for manufacturing

Three economists on how the manufacturing sector can bounce back
This article originally appeared in the Toronto Star.

Know your advantages

Manufacturing absolutely has a future in Canada, and in particular southwestern Ontario. The key to understanding the future of the industry is in knowing where our competitive advantages lie.

Low labour costs will never be a comparative advantage for Canadian manufacturing, but given those “costs” are largely wages, this should not be seen as a problem. Less obvious is how proximity to markets is no longer a comparative advantage for traditional manufacturing regions. The world’s economic centre of gravity is heading toward Asia, which places goods from southwestern Ontario at a geographic disadvantage compared to most other parts of North America. Even markets within North America are changing. In 1900, neighbouring cities such as Cleveland (7th), Buffalo (8th) and Detroit (13th) were among the biggest cities in the U.S. Now those cities are 48th, 73rd and 18th in population.

This disadvantage may pose less of a problem than it to appears at first glance. With supply chains becoming increasingly global, a smartphone assembled in China may have an operating system designed in Kitchener-Waterloo and Brantford, applications programmed in London and Windsor and use precision-crafted parts from St. Thomas and Sarnia.

The region maintains a number of advantages, including a financial sector that is familiar with the industry. We have one of the most well-educated workforces in the world, which gives us an advantage when it comes to precision manufacturing and products where high-quality control is important, such as food. Although our labour costs are high, there are significant cost advantages in other areas, such as access to land and clean water. Manufacturers that use these advantages are well-positioned for future growth.

— Mike Moffatt, assistant professor, Ivey Business School

Three ways to act now

Ontario manufacturing has had a rough ride over the last decade. A number of factors have been at play, including the rise of the dollar, the deep U.S. recession, and the growth of competition from emerging economies. However, we should not conclude that Ontario manufacturing is down for the count. Far from it.

In some research looking at leading Canadian firms done at Ivey’s Lawrence Centre, we find reasons for optimism. Firms such as Linamar, Magna and Shawcor are competing and winning at home and in global markets. Focusing on high value-added manufacturing, they are making the most of Canada’s skilled workforce and capacity for innovation to win new business around the globe.

Business and public-sector leaders convened with Ivey researchers in November to translate our research findings into action. They agreed on three recommendations for immediate action.

Leaders agreed that the primary responsibility for manufacturing success lies with the private sector. Therefore they aimed their first two recommendations at firms. Their first was to find a mentor: Firms seeking to expand into international markets need the counsel and advice of seasoned executives.

Their second recommendation was to form partnerships with local educational institutions. To attract the next generation of skilled workers and managers to manufacturing, firms need to connect directly with students by visiting classrooms and hosting plant tours. Linamar is a good example of a firm that is putting these ideas into practice.

Finally, leaders are looking for governments to raise their game, particularly in the area of attracting investment. Despite Canada’s many advantages, jurisdictions such as Mexico are winning the investment attraction game, even when wages are a small part of the total business proposition. Ottawa, provinces and municipalities need to work together to put our best case forward.

Ontario can compete and win at manufacturing. The leading firms we studied prove it. We need to stop focusing on our problems and start taking action on solutions.

— Paul Boothe, director of the Lawrence Centre at Ivey

How to work together

The recent depreciation of the Canadian dollar combined with recovery in the United States opens up a temporary window for recovery of Ontario’s hard-hit manufacturing sector. Those companies that have survived a brutal decade have the opportunity to grow. However, recovery will not happen automatically, and will require a major effort on the part of many players.

Support for new corporate investment is critical, but lowering the overall corporate tax rate has had little impact. Ontario’s corporate tax system should use enhanced tax credits to reward companies that invest heavily in new machinery and equipment, research and development, and worker skills.

Governments must also ensure access to the “patient” equity capital needed to finance investment that has a long-term payoff. Given the small scale of venture capital funds in Ontario and the focus of banks on short-term loans, we should establish an Ontario public investment bank focused exclusively on manufacturing. Such a body should operate at arms’ length from government, on the model of the federal Export Development Corporation.

Ontario has had a patchy record of fostering collaboration between the key players in a successful modern economy: government, companies, the post-secondary educational system; local governments; and unions. Drawing on past successes, Ontario should establish province-wide and local sector councils, bringing key players together to promote and deliver skills training and collaborative research programs. Community colleges can play a major role in rebuilding local manufacturing.

A revival of Ontario manufacturing will require active government leadership, and a spirit of partnership. It will certainly not come about if public institutions and unions are seen as the enemy.

— Andrew Jackson, Senior Policy Advisor, Broadbent Institute