Canadian Manufacturing

Unleashing the Canadian beast

Success in global economies calls for upgrades to infrastructure, trade policies: Conference Board

OTTAWA― Outdated transportation and trade agreements are keeping Canadian businesses from reaping opportunities in international markets.

In our continued coverage of the five economic policies to help Canadian manufacturing succeed, we explore improvements to trade and infrastructure.

“There are too many examples of infrastructure problems here that are directly affecting the productivity of firms and their ability to compete,” says Glenn Hodgson, senior vice-president and chief economist at the Conference Board of Canada.

“We’ve been talking about twinning the bridge in Windsor for over a decade now and still haven’t figured out a model,” he says.

“In Montreal, the Champlain Bridge is one tremor away from being unusable.”

It’s more than just bridges that need repairing―road, railway, power transmission and broadband issues are also hurting business operations.

“Recently here in Ottawa, a water main broke, leaving people scrambling to keep water flowing to businesses and homes,” Hodgson points out.

He calls Canada’s infrastructure deficit “mind-boggling,” at $125 billion for municipalities alone.

To address that deficit and improve industry’s performance, it’s going to take serious investments in infrastructure from all levels of government, he says.

And until that happens, Canadian businesses will continue to miss out on growing opportunities in international markets.

“Globally there is a lot of interest in Canada’s natural resources, particularly in Asian economies that are industrializing,” says Wendy Dobson, co-director of the Institute for International Business in the University of Toronto’s Rotman School of Management.

“We need infrastructure improvements to the way we move our resources and other goods off the ports on the west coast,” Dobson says.

She says initiatives such as the Pacific Gateway Project are making progress.

But infrastructure improvements won’t do much to advance Canada’s presence on the global stage so long as international trade agreements remain outdated as well.

The Conference Board recommends the government pursue new bilateral free trade deals, such as with the EU, India and China.

Dobson says Canada has been in talks with countries such as Singapore and Korea for a decade but hasn’t concluded any deals.

Canada also hasn’t moved on the Trans-Pacific Partnership (TPP), a free trade agreement between New Zealand, Singapore, Chile and Brunei Darussalam that the U.S. is planning to join and wants Canada on board with as well.

“We’re not being very smart in how we’re using our trade negotiation resources,” Dobson says.

The Canadian and U.S. governments also need to work on breaking down border security barriers that are creating costly delays for exporters.

While Canada’s new majority will have its work cut out for it when it returns to Parliament, businesses too will need to upgrade their strategies.

The board report recommends governments work with firms to examine how they fit into global supply chains and develop ways to reduce risks in international markets.

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