The difference between success and failure for ag manufacturing sector

Canada’s manufacturers of specialized farm machinery occupy a unique place in this country’s economic story. They were innovative long before the word entered common usage. Called “shortline” producers because of the specialized nature of the combines, seeders and other equipment they invent, the members of the Agricultural Manufacturers of Canada (AMC) have been at the heart of cutting-edge farming practices for decades. But today this innovative sector, which makes a unique contribution to Canada’s export performance, is facing serious challenges as manufacturers cope with changing operational demands and a copyright problem threatening their very existence. These issues endanger a manufacturing tradition that over our history shaped Canada’s agricultural practices and, in many respects, created the opportunity for rapid European settlement in the late 1800s. Currently, AMC’s 250 member companies export more than $2.3-billion a year in agricultural implements to 154 countries. As the federal government develops a 2021 budget and blueprint for post-pandemic growth and renewal, Ottawa needs to recognize the challenges ahead for agricultural manufacturers and all small- and medium-sized enterprises (SMEs). Manufacturers are seeking to rebuild, innovate, renew hiring, and expand their businesses, domestically and globally. Supporting the environment For farmers, machinery and equipment are their second-most important asset—after their land. Preserving the environment and acting as responsible stewards of their soil, water, and air has always been a part of the sector. The agriculture sector is continuously taking significant steps to produce more with less while at the same time reducing pollution. To help the agri-food sector make energy-efficiency upgrades and manage the cost of the carbon tax, the federal government should increase its carbon-tax offsetting measures, furthering green growth. It is estimated SMEs account for about half of carbon tax revenues, but are receiving only a very small portion of federal rebates, according to the Canadian Federation of Independent Business. The rationale for this allocation of carbon tax rebates—that businesses could pass on their added fuel costs to consumers—has not been borne out. Policymakers should improve the portion of carbon tax revenues being rebated to SMEs in provinces where the regime applies. Similarly, a wider range of SME manufacturers need assistance under government programs. The proportion of funding covered by the federal government under the SME Project Stream of the Climate Action Incentive Fund should be increased from the current 25 per cent. This would make the program applicable to more small- and medium-sized manufacturers looking to reduce energy use and emissions in their industrial operations. The federal government must carefully examine the impact of the looming ban on single-use plastics on manufacturers. Plastic pollution is a serious international problem, but to reduce potential negative impacts on manufacturers in Canada, the government should consult widely on which products should be banned, the timeframe for businesses to adapt, and related costs. Similarly, we hope the federal government will ensure its proposed Clean Fuel Standard will not impose an additional burden on manufacturers, as they struggle to rebound and keep their businesses solvent in the aftermath of COVID-19. Reducing trade barriers, ensuring equipment interoperability Canadian exporters are concerned about growing protectionism and international tensions that have stalled a half century of international progress on reducing trade barriers and expanding global commerce. The federal government must strike a balance between protecting Canada’s interests and diversifying Canadian exports; we support engaging in negotiated agreements to reduce reciprocal tariffs on the widest possible basis. Export Development Canada should continue to expand its valuable role supporting Canadian companies seeking to break into new markets—in South America, Central America, and other developing regions. EDC’s support can make the difference between achieving a sale and being unable to complete the contract. At the same time, our manufacturers face an urgent situation on another trade-related issue. Under the Canada-U.S.-Mexico agreement, discrepancies between U.S. and Canadian copyright law governing interoperability of equipment have raised pressing questions about the ability of Canada’s specialized farm machinery manufacturers to innovate and even remain in business. The Canadian government is seized with this shortcoming in our copyright provisions. But it must move urgently to protect Canadian agricultural equipment manufacturers from being squeezed out by the proprietary tactics of large original equipment manufacturers in the U.S. Increasing the sector’s exports to at least $75-billion by 2025 The past year has seen enormous changes and the pandemic has shifted our economic realities. But, looking ahead, Canada’s agricultural manufacturers remain in a strong position to contribute to the federal objective of increasing the sector’s exports to at least $75-billion by 2025. However, success in the post-pandemic period is not an assumption. The federal government has directed Small Business Minister Mary Ng to prioritize efforts to help Canada’s agricultural industries succeed in global markets. To achieve that, the government should aim for balanced, workable policy approaches as we transition out of the pandemic. The right policies will enable Canada’s innovators in the agricultural manufacturing sector to overcome today’s challenges and continue to excel in their best competitive tradition as we rebuild a stronger, more resilient economy. Donna Boyd is president of Agricultural Manufacturers of Canada. The Hill Times

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The difference between success and failure for ag manufacturing sector

Ottawa must must move urgently to protect Canadian agricultural equipment manufacturers from being squeezed out by the proprietary tactics of large original equipment manufacturers in the U.S.

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