Canadian Manufacturers & Exporters

Canadian Manufacturers & Exporters

November 14, 2008 15:18 ET

Urgent Action Needed Before Economic Storm Hits Canadian Industry, Warns CME

OTTAWA, ONTARIO--(Marketwire - Nov. 14, 2008) - "News today from the US Department of Commerce that retail sales south of the border fell by 2.8% in October - their largest one month decline on record - provides an indication of the economic challenges that lie ahead for Canada's manufacturers and exporters," says CME President Jayson Myers. "We need to be prepared as the full impact of the global credit crisis begins to hit the Canadian economy. It is critical that governments and financial institutions act to ensure that competitive Canadian companies are able to access the credit they require to ride out the storm.

"We cannot be complacent about the impact that the US and global recession will have on Canadian industry," Myers says. "This morning's report from Statistics Canada that manufacturing sales remained virtually unchanged in September gives a false impression of what lies ahead."

"The global credit crisis is already having a negative impact on Canadian manufacturers and exporters. Tightened credit is leading to a steep downturn in consumer and business spending. Viable, highly competitive businesses are threatened as inventories rise, investments are postponed and orders fall off sharply or are cancelled," Myers says. Statistics Canada reports that new orders received by manufacturers declined by 3.6% and exports fell 1.0% in September.

"We are confident that sales will rebound as global credit market conditions improve and financial markets stabilize. But in the meantime Canadian businesses need to raise additional credit to maintain operations and to avoid more widespread lay-offs and closures."

Last week in a letter to the Prime Minister CME urged the Canadian Government to respond to the crisis by focusing on three objectives. First, it must address immediate liquidity problems by ensuring that credit continues to be made available to viable businesses. CME asked the Government to introduce temporary measures to secure business loans and lines of credit so the financial system will continue to work for otherwise creditworthy businesses facing the prospect of a sharp downturn in demand.

Second, the government should counter recessionary pressures by speeding up investments in strategic transportation, border, communications and energy infrastructure. The Government should also provide tax incentives to encourage businesses themselves to invest in new productive technologies, innovation, and skills - the investments they will require to emerge from the recession on a more competitive footing. Finally, the Government's economic plan should focus on policy measures that will improve Canada's long-term competitiveness. CME's letter to the Prime Minister is available online at www.cme-mec.ca/pdf/epmletter_e.pdf.

"The lesson we must learn from the meltdown in financial and commodity markets is that every boom will inevitably turn to bust if it is not sustained by investments in real value creation. This is the time when urgent action is required to improve the business environment and encourage investments in our key wealth generating sectors - manufacturing and exporting," Myers says.

Canadian Manufacturers & Exporters (CME) is Canada's leading trade and industry association and the voice of manufacturing and global business in Canada.

The association directly represents more than 10,000 leading companies nationwide. More than 85% of CME's members are small and medium-sized enterprises. As Canada's leading business network, CME, through various initiatives including the establishment of the Canadian Manufacturing Coalition, touches more than 100,000 companies from coast to coast, engaged in manufacturing, global business and service-related industries.

CME's membership network accounts for an estimated 82% of total manufacturing production and 90% of Canada's exports.

Contact Information

  • Canadian Manufacturers & Exporters
    Jeff Brownlee
    Vice President, Communications
    613-238-8888 ext. 4233