Getting youth interested in manufacturing crucial for future of Ontario sector: report
As local manufacturers grapple with the ongoing trade war with the U.S., they're also contending with another equally pressing issue — a rapidly aging workforce and an urgent need for new, trained workers.
A new report from Canadian Manufacturers and Exporters (CME), released Thursday, shows Ontario's manufacturing sector is set to lose 22,500 workers per year through 2033 from retirement.
It's an issue set to hit the London to Windsor corridor hard, where the sector employs tens of thousands of people, or nearly 16 per cent of all jobs.
Considered the heart of Canadian manufacturing, the corridor has faced ongoing labour shortages and challenges securing enough graduates in certain trades, CME says.
A projected drop in college enrolment numbers, driven by the federal cap on international study permits, will only exacerbate the problem, along with corresponding financial pressures and program cuts.
"We've had a difficult time getting new folks in and really getting (them) ready to be that productive, next-generation workforce," Dennis Darby, CME's president and CEO, told Afternoon Drive.
That next-generation workforce is needed not just to replace retirees but to fill new positions at new manufacturing expansions, including the EV battery plants in St. Thomas and Windsor.
It's critical, Darby says, to begin engaging students as early as Grade 6 and 7 about the possibility of entering careers in manufacturing.
"It's about not only ... how do we get kids to take the courses, like everything from mechanics to machinists to CNC operators, but also to upskill the workers we have," he said.
"We've got an awful lot of people that have been in the sector for years ... and we've got to constantly upskill, all because we're going to have to be more competitive."
The association makes several proposals, including improving incentives for employers to offer on-the-job training, and "addressing obstacles causing apprentices and students to abandon the sector."
It also suggests more be done to attract women, Indigenous people and immigrants to the sector.
It comes on the heels of a separate report from the Financial Accountability Office of Ontario (FAO).
Released Wednesday, the FAO report estimates U.S. tariffs and Canada's response could lead to an estimated 68,100 fewer jobs in Ontario this year, rising to 119,200 by next year.
The tariffs would impact southwestern Ontario cities and manufacturing hardest.
In the London area specifically, employment could fall 1.3 per cent in 2026, making it the fifth-most impacted Census Metropolitan Area (CMA) in Ontario, the FAO says.
Driven by reduced demand for Ontario exports, the province's real GDP growth would slow to 0.6 per cent, compared to 1.7 without tariffs. "This implies that a modest recession would occur in 2025," the report says.
Ontario's GDP would take the biggest hit from tariffs on motor vehicle parts, primary metals, and motor vehicle manufacturing.
The agency based its analysis on trade actions announced by Canada and the U.S. as of April 17.
U.S. Customs and Border Protection guidance released Thursday said CUSMA-compliant auto parts would not face the 25 per cent auto part duties set to go into effect May 3. It's not clear what effect this would have on the FAO's projections.
The trade war has eroded consumer confidence on both sides of the border, driving down demand for goods and services, said Fraser Johnson, a professor of operations management at Ivey Business School.
Johnson runs the Ivey Purchasing Managers Index, which measures the month-to-month variation in economic activity as indicated by a panel of purchasing managers from across Canada.
"We've seen a softening in terms of purchases, which is a leading economic indicator, and we've seen an escalation of prices over the last four months," he said.
"It presents the risk of stagflation, where we have slow economic growth and rising prices."
Small and medium-sized businesses are most vulnerable, he said.
Canada's real GDP shrank in February by 0.2 per cent, while in the U.S., the economy shrank at a 0.3 per cent annual pace from January through March, the first decline in three years.
Trade with the U.S. accounts for at least 77 per cent of the Ontario's total goods exports.
Nearly 940,000 jobs in Ontario, roughly one out of every nine, are U.S. export-related, many of them in manufacturing, the FAO said.
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