Equipment manufacturing executives are hoping for a growth- and business-friendly federal budget following meetings with parliamentarians and government members in Ottawa on Tuesday.
“I think everyone agrees with what we’re talking about, no one is suggesting anything different,” Linamar Corp. CEO Jim Jarrell said after meeting chiefs of staff, parliamentarians and deputy ministers of federal departments ahead of the Nov. 4 budget. “I think it’s going to be a pro-business, pro-growth budget, I think it has to be.”
The comments were made during a roundtable organized by the Association of Equipment Manufacturers (AEM), which represents more than 1,000 members in the equipment manufacturing sector.
AEM members noted that the impact of the trade war with the United States and China has been “tremendous.” The manufacturing sector lost a cumulative 58,000 jobs between January and August, although the sector showed some signs of life in September, adding 28,000 jobs.
The main elements that AEM members would like to see in the next budget include tax incentives for bonus depreciation and investment in research and development. Executives are also seeking greater incentives for companies to adapt to new export markets.
“To develop something new for a new export market, European regulations can be very different,” said Charles Vennat, president and CEO of CMI Inc.
a leading manufacturer of crawler mulchers and stump grinders.
“So there are licensing requirements, design changes are required, I mean the size of our machines cannot run on most European roads.”
Many of these measures are in U.S. President Donald Trump’s “Big Beautiful Bill,” and equipment manufacturing executives said Canada will have to do the same to compete.
“So whether it’s R&D or bonus depreciation, all of those provisions that were expanded or made permanent have been a huge boom for the industry in the United States,” said Kip Eideberg, senior vice president of government and industry relations at AEM. “That’s why we’ve been encouraging the Canadian government to look at that and do the same thing.”
Regarding trade uncertainty, the EMP remains confident that an agreement can be reached during the review of the Canada-United States-Mexico Agreement (CUSMA), which is scheduled for next year.
“It’s hard to imagine Canada, the United States and Mexico not reaching some agreement,” Eideberg said.
“Since the beginning of NAFTA, we have truly operated as an industry as if there were no borders,” he added. “That’s how we were taught, adapted, and excelled at doing business.”
Executives estimate that tariffs on steel and aluminum have increased their costs by five to seven percent and hurt the bottom lines of most companies in the manufacturing sector, and they say companies will not absorb those costs for much longer.
“Ultimately, the tariffs will be inflationary and inflation can affect the markets we serve, and that will potentially affect the production of our products,” said Yannick Montanago, president of Kubota Canada.
• Email: jgowling@postmedia.com
