February 20, 2025
The Empire Club of Canada Presents
Manufacturing and Exporting in the New World Order – Trade, Tariffs, and Trump
Chairperson: Jenna Donelson, President, Board of Directors, Empire Club of Canada
Moderator
Vincent Caron, Vice-President, Ontario Government Relations and Member Advocacy, Canadian Manufacturers & Exporters
Panellists
Simon Drexler, President, Samuel Automation
David Glover, Co-Owner, Harbour Technologies
Dawn Desjardins, Chief Economist, Deloitte Canada
Rob Wildeboer, Executive Chairman, Martinrea International Inc.
Head Table Guests
Dan Nolan, Vice Chairman, National Bank
Michael Garcia, President & CEO, Algoma Steel
Welcome Address by Jenna Donelson, President, Board of Directors, Empire Club of Canada
Welcome, everyone. I’m Jenna Donelson, Chair of the Board of this historic organization, and your host for today’s event.
To formally begin, I want to acknowledge that we are gathering on the Traditional and Treaty Lands of the Mississaugas of the Credit, and the homelands of the Anishinaabe, Haudenosaunee, and Wendat Peoples. I encourage you all to learn more about the Traditional Territory on which you live and work.
This event would not be possible without the generous support of our sponsors. The Empire Club is a non-profit organization, and our sponsors generously support the club. They make events like these possible, and viewing complimentary for those of you that are online. Please join me in having a big thank you to our Lead Sponsors, Algoma Steel, and National Bank Financial Markets. To our VIP Reception Sponsor, McKinsey. Thank you. We also deeply appreciate the ongoing support of our Lead Season Sponsors, Bruce Power and Hydro One, as well as our VIP Reception Season Sponsors, Waste Connections of Canada, and Ellis Don. Thank you. Finally, thank you to our Media Partner, the Toronto Star, and our AV Partner, Bespoke Audio Visual. Appreciate your support.
If any of you have a question for our speakers, please scan the QR code that you will find on your program. For those of you that are online, use the Q&A function, if you have a question. If you are online and you need assistance, please use the chat function, and our staff will be there to help you.
So, we all know that the title of today’s event is “Manufacturing and Exporting in the New World Order; Trade, Tariffs, and Trump.” Now, we set this event up a few weeks ago, and in the short time between creating it and hosting it, things have changed so very much. I think that’s something that everyone in this room can especially appreciate. So, I want to address that for a moment, because these feel like completely unprecedented times, to many of us. The Empire Club has been hosting gatherings like this one, on subjects very much like this one, for more than 120 years, and that gives us a bit of a longer lens on history than most other organizations we have here in Canada.
So, let’s go back in time, to 1933, to a moment where Canadian manufacturing was at the peak of the Smoot-Hawley Tariffs and reeling from the Great Depression. Here, speaking to this very club, Major L.L. Anthis, the president of, then, the Canadian Manufacturers Association—which later became CME—said something that could almost be expected from this very stage today. I’m going to pull out some of what he said. He said, “The long line of progress has been steadily upward, cutting across peaks and valleys. I believe that history will repeat itself, with some variations, and all that this country possesses is the accumulation of results of efforts of millions of Canadians. It is our heritage and trust for the present, and future generations.” Or to put that in a more modern turn of phrase, “I believe in Canada. I believe that we will get through this moment, and I believe we will prosper.”
Yes, in many ways, these are unprecedented times. Certainly, the speed of events is unprecedented. But there’s wisdom in our past, if we choose to listen to it. And there will be valuable insights from this very stage today. I know everyone here is eager to hear it.
And so, now it’s my pleasure to introduce one of our Lead Sponsors today. Michael Garcia has been at the helm of Algoma Steel, since 2022. And he’s been a leader in steel, pulp, paper, and aluminum, for over 30 years. We’re lucky to have him here today, to get this important topic started. So, please join me in welcoming to the stage, President and CEO of Algoma Steel, Michael Garcia.
Opening Remarks by Michael Garcia, President & CEO, Algoma Steel
Thank you, Jenna. It’s been a real pleasure to be here today, on behalf of Algoma Steel. At Algoma Steel, we’ve been manufacturing and exporting steel products into the US and across North America for over 100 years. So, the title of the event, “Manufacturing and Exporting to a New World Order,” is certainly relevant for us. We are excited about that. And perhaps, given Jenna’s comments about the history, and it seems that these type of subjects are always on our minds, throughout the last 100 years, it’s, it’s not so much the new world order, but it’s the next world order. Because it’s always going to be the next world order.
So, we’re paying very close attention to the developments around tariffs, and the impact it would have on Algoma Steel. We are one of the premier steel companies and manufacturers in Canada. And with the recent acquisition of Stelco by Cleveland Cliffs, a US-based company, we are the only remaining independent publicly-owned steel company in Canada. Tariffs will significantly impact us. And it’s something we’ll have to manage through. Regardless of that, we’re quite bullish on the future, at Algoma Steel. We are implementing a new electric arc furnace project. With that implementation of this new steelmaking technology, we will reduce our carbon emission by over 70%, and increase our steel capacity by 30%. So, we’re quite excited about that. We don’t know if we’ll be selling the same amount of steel, roughly half that we produce, into the US, as all these tariffs get shaken out. But we know, with the world-class assets that we have, in Sault Ste. Marie, we will be selling our steel somewhere. So, it’s our pleasure to be here. Really looking forward to the conversation to come. And thank you for having us.
Jenna Donelson
Thank you, Michael, for those words, and for your leadership. Now, to set the stage for our panel discussion, I am delighted to bring up our next speaker. She is the Chief Economist at Deloitte Canada. She’s here to provide us with some important economic context for this discussion. So, please join me, in welcoming to the stage, Dawn Desjardins. Welcome, Dawn.
Dawn Desjardins, Chief Economist, Deloitte Canada
Well, it was great to hear Michael’s optimism, because I think I might be bringing you all down a little bit, when I give my analysis of how we’re seeing the economy in the near term. I’ve been thinking about it, and I hearken back to an old movie, “The Good, the Bad, and the Ugly.” And certainly, there are some good things for Canada. When we think about the near-term outlook, there is a few things that are working in our favour, in terms of growth. We have an abundant natural resources, which, of course, is instrumental to keeping Canada growing and healthy. And in the here and now, we have relatively low inflation. We have interest rates that are coming down pretty rapidly. And this is supporting our economy. We are seeing consumers being able to manage through their elevated debt levels. And businesses, of course, are really facing some very challenging times. So, not so much from a financial perspective anymore; it’s more a confidence problem—and totally, totally reasonable, to think that Canadian businesses are worried, and not necessarily putting money to work.
Because we know that we do surveys. And what are businesses saying? Well, a Deloitte, survey of CFOs, tells us that 70% of Canadian companies said not a good time to take on risk. In sharp contrast to other North American areas, where 67% said, yeah, it is time to put money to work. So, we know that that’s kind of the bad part of our economy right now, this lack of confidence. Which is, I think, the most reasonable way we can talk about it. Additionally, when we think about the engines of growth for Canada, immigration being a very strong growth support, that, too, is going to be more of a deficit for the economy, at least in the near term.
So, all my comments really are about what’s happening in the near term, as we go through this period of, really, extreme uncertainty. No matter which measure you look at, Canada’s economy is now facing some of the most uncertain times—in fact, by one metric, even more uncertain than during the pandemic.
And then, we get to the ugly. Of course, tariffs are, for most economies—and I think, probably, for all economies—a detractor from economic activity. It leads to a misallocation of resources, and often leads to job losses, and could, over time, actually put economies on a slower growth trajectory. Now, when we look at Canada, and, you know, our baseline, based on the good news, would say we should be growing about 2%. But if we layer on the tariffs that have been threatened on Canada, 25% tariffs, that would halve our growth rate, in 2025. And it would keep it growing at about half a%age point lower than it otherwise would. If we retaliate, we would see, in fact, our economy slip into recession.
So, people often say, well, if, you know, that, why would you do it? But we think about why people put tariffs on, in the first place. We have the three R’s. One is revenue. And certainly, the Trump administration is looking for revenue, as they try to implement corporate cuts, corporate—excuse me, income tax cuts. So, they’re looking to offset there. The other is restriction. If you feel that another country is, in fact, supporting an industry which is reducing your competitiveness, in that market, you could levy a tariff on that. Or reciprocity. And that just means putting it on, to match the other party, so that you have something to actually deal with, to negotiate.
So, we’re going through a very difficult time. I think our baseline view is that we will see reciprocal tariffs, that will create significant headwinds for Canadian companies. And so, again, a bit of the downer, in terms of setting the stage. But I think, when we think about this whole reordering of the world trade, it is definitely going to be an opportunity for some Canadian companies to look to other markets to export to, to look at establishing other supply chains. But in the near-term, I think it’s going to be quite tough sledding for Canadians, and Canadian companies. So, that wasn’t exactly the uplifting outlook that I’d like to deliver. However, I’d like to pass it on, now, to Jenna.
Jenna Donelson
Thank you, Dawn. Thanks for giving us a clear-eyed view of this economic moment. And it is important to ground these discussions in data. And that’s partly why we appreciate you setting the stage for us. Now, it’s time for our panel discussion. I’m going to invite the panellists to join Dawn on stage, while I read you their brief bios.
We have Simon Drexler, president of Samuel Automation, joining. We have David Glover on our panel, Co-Owner of Harbour Technologies. Rob Wildeboer is joining our panel, Executive Chairman of Martinrea International. And of course, joining them is our moderator, Vincent Caron, the Vice-President of Ontario Government Relations and Member Advocacy at the Canadian Manufacturers and Exporters. While they all take their seats, will you join me in welcoming to the stage. Vincent, over to you.
Vincent Caron, Vice-President, Ontario Government Relations and Member Advocacy, Canadian Manufacturers & Exporters
Thank you very much. I mean, it was really great to see the words of a former CME president, then the Canadian Manufacturers Association. If I go maybe back a little further in history, in 1871, Canada was four years old. Canada was as old as my youngest daughter. And the Ontario Manufacturers Association was created here in Toronto. And that was really the beginning of Canada, building a country east-west, using the tools we had at the time, right? The railway, trade with Britain, and the British colonies. And we built that country on that idea that we are, we are one nation. And it’s something that has really been propelled by, by free trade, right? Like, our economy has really grown through free trade, but we remain who we are. We did a century of a strong manufacturing sector, without free trade. And then since then, in 1965, starting with the Auto Pact, the integration really brought us to new heights.
But really, what we really need right now is to think through, you know, zoom, let’s zoom out, a little bit, from the moment. Because this moment, I mean, obviously, we all feel it. Every day we watch the news. It’s the headline—it’s one headline after another. And we’re all hoping for a good resolution. But hope is not a strategy. So, what we’re hoping to do here today, is focus a little bit more on what our entrepreneurs need, on what our manufacturers, our leaders in auto, and food, and automation, in chemical products, all the things that we make here. Let’s look at what we can do.
Obviously, it’s in the DNA of the Empire Club, and CME, to, to be here today, and talking about working together, and working together as one nation. But we really do need from, we need to hear it from the business leaders. And we need to do it for them. So, it’s really good to have everyone here today. And Rob, I think I’ll start with you. Because we’re talking about using a crisis to deliver results. And I think there’s no better person than you, to talk to us about this. You were talking recently, on the recent podcast that you did, and talking about 9/11. And the time when Martinrea was created, and, and, you know, you were watching things unfold on TV. And, and what—how did, how did Martinrea use this moment? And how did you grow from that point?
Rob Wildeboer, Executive Chairman, Martinrea International Inc.
Well, on 9/11, I felt depressed—I felt almost as depressed as I did after hearing the economic outlook that we just heard. We, we started as an auto parts company on September 10th, 2001. We bought three presses, and I had a bought deal letter the next morning, for financing. And the guy on the other side says, “You better turn on your TV, because something’s happened.” And I looked at it, and of course, it was a tragedy. But I was thinking, how are we going to pay for those presses?
Since that time, we’ve been through 2008 and ’09, and COVID, and everything else. Our company, from a small Toronto base, has grown from zero to about $5 billion in revenues. We have 19,000 employees, 2,000 in Canada, 4,500 or so, in the United States, 9,000 in Mexico. And we’re around the rest of the world, as well. So, we’ve managed to grow, through crisis after crisis—and I always say, never let a good crisis go to waste. People are going to buy cars, they’re going to need parts for cars, and there’s opportunities, as far as that goes.
But in terms of this particular issue that we have, I think it’s important to figure out how we talk to the Americans, right? And the Americans, from an American perspective. So, I was in Washington last Monday, Tuesday, Wednesday, with five other CEOs of major Canadian companies, market cap $200 billion in total, including Cameco, which makes uranium for the United States, Nutrien, which makes fertilizer for farmers in the United States,AltaGas, which, effectively, powers Washington, DC. —so, you’re talking to people, and say, “I can shut off your power.” And that’s always interesting. And I got to represent the auto industry. And I started with this, I said—and we all, you know, cribbed our three to four-minute discussions—and I started with, okay, we have 2,000 people in Canada, we have 4,000 people-plus, in the United States. And I would say, we’re the largest employer, in most of the places that we have plants. And I would say that most of our people voted for Donald Trump. And they voted on the basis of lower prices, stronger economy, better jobs, and so forth. And they’re seeing higher prices, they’re going to get higher prices, they’re going to get less job security, and a weaker economy with tariffs. Because a tariff is a tax on the American consumer. And in our business, it’s going to increase prices.
The second thing is, I hope you realize that you came within two days of shutting down the auto industry in the United States, in North America. And we were talking to, among others, the chief economist of Donald Trump. We were in the White House with a senior official. And he said, “Well, why is that?” And I said, “Well, you don’t realize that the car has 45,000 parts. You’ve got parts crossing the border all the time. And at the end of the day, it’s not so much the OEMs. They can say, ‘well, we’re going to keep manufacturing.’ But if you don’t have parts for your vehicle, and people aren’t going to ship, because they can’t afford it, or won’t pay the tariffs, or the trucking company won’t get the money, you shut down. And you shut down, in two days, the entire industry.: And that’s why, I think, the announcement on Saturday was pulled back on Monday. And I think that’s the reality of the industry. And we have to understand that, from American perspective.
The other thing that—I’ve been a big advocate of Fortress North America. The real issue for the United States is China. It’s not Mexico and Canada. You need friends. If you go south of Mexico, the leading trading partner of everyone in Central America and South America is China. And the leading trading partner of the United States is Mexico and Canada. And at the end of the day, you’re going to need friends. I always say, the US is blessed with the four best neighbours in the world, the Atlantic, the Pacific, Canada to the north, with its resources, and people, and talent, and Mexico to the south, with its resources, and people, and talent. And at the end of the day, fortress North America can, effectively, dominate this century. So, recognize that we’re together. And at the same time, recognize that Canada is your biggest consumer. We buy more from the United States than China, Japan, and Germany combined. And we don’t have to buy all that stuff.
And then the other thing, the other aspect that we need to recognize is, America has legitimate points, with respect to Canada, too. We’ve been awful on the border. There’s more terrorists going to the United States from the Canadian border than from Mexico. We’ve been awful on fentanyl. But the issue is not so much fentanyl; it’s the fact that we’re soft on crime. And that’s viewed as an issue in the United States, from very senior people—senators, and chair of the Ways and Means Committee staff, we heard that. They think that it’s ridiculous that we don’t protect our North. We should be spending 3 to 4% of our GDP on protecting our country, like we did in the ’60s. We stopped doing that in Trudeau 1, in the ’70s. And at the end of the day, we should be protecting the Arctic, not relying on the United States. It’s our friggin’ land, right? In that context. We should unleash our energy, we should lower our provincial trade restrictions, and we should be strong. And at the same time, we can fight back. We can hit back.
So, you know, just as—how many people watched the hockey game, Saturday night? All right. The Americans started three fights with us, okay? The first one, Matthew Tkachuk, was on the ground; I think he probably lost the fight, and might have injured himself. The second one, Brady Tkachuk, won the wrestling match. The third one, JT Miller, took on Colt Parayko, and got shaken like a ragdoll. And at the end of the day, we don’t start fights, but we fight back.
And so, in that context, I think the right thing is to recognize that we do retaliate with tariffs, and inflict pain, so that, effectively, what happens in the United States, is people in local communities, who have no problem with Canadians, effectively, say, “This is affecting my farm community. This is affecting my Kentucky bourbon. This is affecting my orange juice. This is affecting my factory.” And that’s the type of thing that kind of moved us to a good USMCA last time, and I think will get us through this time. So, those are my thoughts.
Vincent Caron
Yeah. I mean, certainly, there is—it’s not the size of the dog in the fight; it’s the size of the fight in the dog, right?
Rob Wildeboer
I like that.
Vincent Caron
That’s also part of the, the Canadian mindset, in this moment, and really standing up for ourselves. David, I wanted to go with you on, really, what Rob was articulating is, a lot of people in the US are compelled with a notion of more self-resilience in North America. And part of that is energy, right? Energy is, is, obviously, a massive opportunity in Ontario, as well. And I think in nuclear, we’ve seen Premier Ford articulate the Fortress Can-Am vision, that’s really heavy on nuclear. And what we don’t often talk about is also what that means to manufacturers. So, it’s obviously a potential point of collaboration with the US, but it’s also a tool of resilience for our manufacturers here. And you’re, you’re a smaller company. You’re in Windsor. You’re right in, on the front lines, there, and that means a lot to you. So, can you tell us a little bit about that opportunity in nuclear, and what we can do in this, in this moment with it?
David Glover, Co-Owner, Harbour Technologies
Yeah. Windsor, obviously, being a border town, we are right on the front line, like you said. Product comes back and forth nonstop, for automotive industry, but for all industry. And you know, Doug Ford kicked off his political campaign in Windsor, because Southwestern Ontario is the hotbed for manufacturing. I had the pleasure of hosting him, when he kicked off his event, or kicked off his campaign. And for the nuclear industry, you got to look at it a lot like the automotive. You have the top tier of the pyramids, your operators, like Bruce Power, OPG. You have your—then, you have your larger OEMs, like AtkinsRéalis, BWXT, Westinghouse. Then you have hundreds of small, medium manufacturers, like myself, supporting that.
And that’s not just Ontario. We do programs worldwide. So, we have Canadian OEMs producing reactor components, refurbishing reactors, designing and building SMRs, for the world market. We plan tooling years in advance, unlike the automotive industry, where it’s almost instantaneous. Budgets are made for reactor refurbishments, and special tooling. Sometimes, you know, it can be almost two years in advance, long before the threat of tariffs were ever an issue.
Vincent Caron
Yeah.
David Glover
So, if we enter into even just the threat of tariffs, but if we enter into a tariff war, you’re going to see industry grinding to a halt in Canada. A lot of big programs are going to stop, because where’s the money going to come from? Eventually, they’ll restart, and we’ll regroup. But you’re going to lose a lot of your supply base. Those key small, medium companies, won’t be able to hang on. They’ll be overleveraged, and waiting for answers. And that’s a big risk that we have.
Vincent Caron
Yeah. Yeah. In the meantime, it’s also these projects. These, you mentioned a long lead time.
David Glover
Yeah.
Vincent Caron
Obviously, that’s something that is a lifeline to our business to have a growing grid, to be able to have our own resiliency, in terms of energy independence. And that’s, that’s an argument for the US, also, articulate a positive vision, in that conversation about tariffs, and ways we can get beyond this, and work together on this. There’s, you know, it’s funny you mentioned the crisis that we could have with, with tariffs. Well, we just went through something fairly significant, with the pandemic.
David Glover
M’hm (affirmative).
Vincent Caron
And you also make medical goods, like hospital gowns.
David Glover
Correct
Vincent Caron
The first time, actually, we spoke, we were in your plant, in Chatham.
David Glover
Yeah.
Vincent Caron
You, you lit a piece of fabric on fire, in front of me—by the way, don’t do this here, I think you’ve got a fire code—but you felt so strongly about the quality of your product that you, literally, set stuff on fire in front of me. So, I want you to talk about this. But more specifically, how can we use the procurement of goods that governments do, to, to really support more local manufacturing? Maybe tell us the story, with your business.
David Glover
Yeah, so that’s a unique story. But the general sense of it is, is it shows how fragile the supply chain is in Canada. And that’s, that example, there, you know, it’s—we’ve got to have government close the loop. We often hear the cry of, you know, stand up, and you know, reshore. And you know, during the COVID crisis, it was, you know, help us out, you know, come up with tooling and machines, and you know, ways to, to fight COVID. But they don’t close the back door, by saying, “Okay, we’re going to buy—now that you’ve invested…
Vincent Caron
Yeah.
David Glover
…in equipment and tooling, we’re going to start buying from…
Vincent Caron
Yeah.
David Glover
…Canada, and making that a priority of Canadian companies.” So, the government has to do that. But also, we have to be conscious of, when we’re in a tariff war, the supply chain being so fragile, as it is. That’s an opportunity, then, for counterfeit and fraudulent goods entering into our supply chain, because people are, go out and look for alternatives. They look for cheaper product to put into their, their machines, or into their goods that they sell, and onto the government, or the consumer, or in worst cases, like power plants, where you need to know you have a strong supply chain, but when you’re under those pressures, people start looking elsewhere.
Vincent Caron
And so, here you are, with investing in dozens of robotics arms, doing industry 4.0 manufacturing, do a gown-a-minute, in your plant. And the response from government wasn’t immediate, to actually buy those products, which were high quality, versus that flammable gown that…
David Glover
M’hm (affirmative).
Vincent Caron
…that you showed me from offshore, right? Which you wouldn’t want in the hospital. So, I think it’s that push to have quality products made here…
David Glover
Absolutely
Vincent Caron
…and supporting our manufacturers, that actually may be going to be a little faster with the procurement processes, and buying the products.
David Glover
When government makes that call for action to reshore, and bolster Canadian manufacturing, they have to be able to back that up by…
Vincent Caron
That’s right.
David Glover
…ensuring that they buy from Canadian manufacturers.
Simon Drexler, President, Samuel Automation
Absolutely.
Vincent Caron
Simon, I want to, I mentioned the robotics, the fantastic robotics that David put in, in Chatham. And I mean, I think it’s no coincidence that manufacturing really grew, in the Waterloo area.
Simon Drexler
M’hm (affirmative).
Vincent Caron
There is a real pull of technology there. And I think we’re all here today, trying to find clues for resilience. And so, when you, you think about industry 4.0, you know, using robotics, AI, sensor technology, to really get our companies to be more efficient and more resilient, how do we use automation for that purpose? And maybe, tell us a little bit about what you do at Samuel.
Simon Drexler
Yeah, I think technology has a very significant role to play in the discussion that we’re having today. You know, we’re really lost, in the short term of what’s happening, and the crisis of, of the now. But technology has the potential to, to really change some troubling trends inside of Canada. And I would start by saying, what we have in Waterloo is an asset to Canada—and I would extend it beyond Waterloo. The Waterloo to Toronto Technology Corridor is an asset for Canada, that is underutilized in our domestic market. Me, myself, I find myself to be quite fortunate. I’ve travelled the world. I’ve seen some of the most automated facilities on the planet. I’ve been a part of deploying some of the most complicated technology that exists in the world today. And the troubling part of it is that much of that happens in Waterloo, but Canada doesn’t know about it. We’re not a particularly boastful group, you know, the automation cluster that exists inside of the Waterloo-Toronto Corridor. And we export way too much of it. The, the makeup of the ratio of technology that’s deployed inside of Canada, versus elsewhere, is off, even by a ratio of the size of, of market that we have domestically.
And so, I would, I would echo what Rob said, in that you never want to let a good crisis go to waste. And I don’t want to overstate or understate the fact that I think we are in a crisis right now. And technology could help to change the problem that I see, which is actually a productivity gap in Canada. The productivity gap in Canada has gotten ignored far too long. We currently sit 18th in the OECD for, for productivity measures. The problem’s actually getting worse, not better. So, in 2023, our productivity fell the, the most of any country, in that group, 1.8%. And we’re actually at a point where a Canadian labourer, actually, outputs about 72% of what an American worker does.
And so, if we do think about a world for Fortress North America—which I completely agree with, by the way—we have to up our game. And to me, the crisis is a call for action, to start to leverage the assets that we have…
Vincent Caron
Right
Simon Drexler
…inside the technology portfolio, inside of the Kitchener-Waterloo Corridor, to do a couple of things. First and foremost, address that gap in productivity. We need to buy Canadian. Take advantage of the assets that we have, to support the domestic supply of goods, and utilize the strengths that we have as a, as a country. We are a highly educated workforce. We are a highly innovative group.
Vincent Caron
Yeah.
Simon Drexler
And we have a demonstrable track record in the Waterloo, Toronto area, of not only developing world-class innovation, but deploying it. The problem is that we most often deploy it outside of Canada.
And the second thing, and, and when it comes to resilience—and, you know, technology helps us, if we’re more productive—but technology can actually help us plug some gaps in our supply chain. And I believe that’s a, a role the, the government is to play, to tell us where we want to focus. It’s too easy to say that we want to buy Canadian. It’s, it’s too easy to say that we want to, you know, strengthen our domestic supply chain. It’s too generalized. Specifically, what are we trying to close? What is the government willing to support? Is that nuclear energy, and we want to invest in Canadian-based supply chain for, for nuclear and energy. Oftentimes, we’re tied to resources, for obvious reasons. But the domestic market doesn’t use resources. The domestic market uses a supply chain that transforms those resources, that we pull from the ground, and turn it into something useful. And so, look at the holistic supply chain, for the things that are important. And we should be looking to lead the world in those things. We talked about industry 4.0. For good reason, we’re, we’re right in the heart of that. Industry 5.0 is already coming to the surface. There are countries, and companies, and market leaders, that are already investing in the next industrial revolution, while we’re focused on the current one.
And so, if we want to lead, we need to get out in front and stop being behind. And we have the minds, we have the resources, we have the infrastructure, and the capability here in Canada to do it.
Vincent Caron
Yeah. And you said the, the word productivity is one thing that we all want to focus on. And there is a moment, right now. There’s, there is really appetite out there for measures that improve productivity. Dawn, just picking up on what, some of the themes we’ve heard here. Are there, are there signs of hope, maybe, to try to give you a chance to redeem yourself, on the introduction?
Dawn Desjardins
I know. Wow. Wow. Yes. Yes. And I love that productivity is actually being spoken about. Because, as economists, we’ve been talking about it for 40 years, because you just see the line, and it’s just not going where we wanted it to go. The CD Howe did some work on it, and it just stuck with me, this, this fact, that if a US company puts $1 behind a worker, a Canadian company puts $0.52. So, it’s not, you know, okay so, to your point, how do we increase the transformation in getting it into the economy? We know we’re a country of small- and medium-sized businesses. So, it’s also that. I think it’s kind of how you get that knowledge transfer to occur, to increase the productivity across the board. And, and that’s, you know, not an easy feat. We know that there’s conversations going on—and at this stage, they’re conversations—but interprovincial trade barriers. A colleague did a study ,in 2021. And what he concluded was that interprovincial trade barriers—which, you know, can be anything, from labour mobility, to the size of tires, to any number of things—acts as a 7% tariff of trade within Canada.
Vincent Caron
M’hm (affirmative).
Dawn Desjardins
I mean, come on. And so, if we actually eliminated them, to a large extent—and I know there’s lots of complicated, it’s not as easy as just, like, okay, we’re not going to have these anymore. But nonetheless, really leaned into that, you could add $80 billion to our GDP every year. That’s something…
Vincent Caron
Yeah.
Dawn Desjardins
…in terms of turning the dial. So, I think there are things. We’re also seeing that permitting, in BC, for example, they’re really leaning into increasing the pace of permitting. You know, we have the, the World Bank puts out as an annual, I think, survey—we’re like one of the worst, in terms of the time to get a building permit in place.
Vincent Caron
M’hm (affirmative).
Dawn Desjardins
I mean, how does that really make sense? So, we have lots of things that are kind of self-inflicted. And I think, to your point, you know, just getting rid of some of these encumbrances, these barriers and regulations, at least it elevates us to a different playing field. And perhaps, we will have to look, you know, outside the US, for some of our exports. I mean, we do still probably want to be a big exporting nation, given a relatively small population with lots of resources. But having said that, how do we, you know, from someone—from a country that’s kind of turned into the unreliable boyfriend, how do we migrate away from that?
Vincent Caron
Yeah, and…
Simon Drexler
That’s a great analogy.
Vincent Caron
…how do we work on ourselves, right? While things are a little iffy on this side. On that, though, like I think we really want to go on practical, actionable solutions. And we want to avoid, obviously, escalating tariffs between Canada and the US. But we don’t control that. So, what do we control? What do our decisionmakers control? Right now, we have a provincial election, and we have one week to go. CME published a questionnaire to all parties. And actually, we’ve gotten quite, very concrete responses. We can, we can tell parties want to do something, and they want to help. And things I haven’t heard before from them—and we will be revealing that, later this week. But I think what we really want to hear from you is, what do you need, in terms of tools to keep growing in this time? Rob, what do you think?
Rob Wildeboer
Well, a lot to unpack, here. We need competition, right? So, we need access to markets. You can talk about trading elsewhere; we’re still at 75% with the Americans, and more with North America. We have to try and open up those markets. You absolutely need to do that. When you’re talking about productivity, the companies in this country that have to compete internationally are productive. Otherwise, they’re out of business…
Vincent Caron
Yeah
Rob Wildeboer
…right? And so, when we see the USMCA negotiation, they’re going to come after our milk marketing boards, and so forth, because they feel like they’ve been lied to about promises on that. You know, when I was young, and you know, started to drink underage wine, from the, Niagara, you’ve got wine in boxes with bubbles. And—because we protected our wine industry. We opened it up; now, we have some pretty decent wines coming from Niagara. That’s, that the nature of the type of stuff you have to do, and you have to embrace technology.
One little factoid: in the auto parts industry, when we started in 2001, we had zero revenues; we have 5 billion now. Linamar was about a billion-and-a-half; they’re 10 billion now. And Magna was 13 or 14; they’re 55 billion now. Those are Canadian-based success stories, going all over the world, competing head-to-head—with everyone fairly, other than China, which cheats, and we have to deal with that, and that’s where tariffs actually make sense. But we can compete, but you have to be forced to compete. And we have a lot of regulated, protected industries, where, effectively, we’ve got a, we’ve got a wake-up call coming from the United States. And they’ve essentially said, “Here, here, here, here. You cheat. You want access to our market? I don’t have access to yours. So, now let’s have that discussion.” And I think it’s going to be a very serious one. But I think it’s, it’s very important for us.
The, the interesting thing is, in 1967, we were the third-richest country in the world—that’s without free trade—because we were forced to be. We were forced to rely, and compete, and all that type of stuff, in the midst of whatever. I think we can do it. I think this is a seminal moment for us. When we talked about at the beginning, you know, challenges make us better. Why not, why let a crisis go to waste? We look at it that way. Every time we’ve gone into a crisis, we’ve come out stronger. Because we’ve chopped the fat, we’ve found opportunities to buy things, and fix things, and provide solutions for customers, and utilize the resources of our people. When people are challenged, they get better. And that’s what we’ve got to do.
Vincent Caron
Yeah. Thank you. And obviously, lots of regulation getting in the way here. I mean, you’ve just got to remove a lot of things that…
Rob Wildeboer
Yeah.
Vincent Caron
…just…
Rob Wildeboer
Just cut it.
Vincent Caron
…create restrictions. Or things like you bring a piece of machinery from Europe, and they’re on different safety standards that don’t recognize each other. And why don’t we recognize each other’s standards?
Rob Wildeboer
You can’t get a building permit. Like, I know somebody who’s been trying to get a building permit in Ottawa.
Simon Drexler
Yeah. It’s ridiculous.
Rob Wildeboer
So, basically, say, if you can’t make a decision in six weeks, the answer’s yes.
Vincent Caron
Right.
Rob Wildeboer
Right? Simple things like that. Or in the United—like, I was in Washington last week, a lot of unemployed civil servants. They’re freaking out. But you know, they’re finding, they’re finding tens of billions of dollars of waste. And they say, “Look, the way we’re going to deal with this, is we’re going to chop it out. Chop it out, and then see what we need.” And to a certain extent, we’ve probably got to do that here, too.
Vincent Caron
Yeah. We’ve asked the Ontario government to bring a bill within 100 days, to make a real difference, in terms of red tape reduction, and removing barriers for, for businesses. Simon, in terms of incentives, anything that comes to mind?
Simon Drexler
I was going to just say, I think the term is complacency. I think we’ve become complacent, relying on the United States for far too many things. And they’ve given us a wake-up call. That is an opportunity for us to take care of our own house. And so, look to the domestic market, and the things that we can do, to strengthen our domestic market, remove provincial trade barriers, buy Canadian, where we can buy Canadian, get the government to look to invest in Canadian technologies—for the, the actual deployment of that technology, not just the development—and then, look for other markets, to allow us to compete globally. Right now, we have work to do, to effectively compete globally, across the board. There’s great success examples in automotive. You know, we’ve got good access to those markets, and good access to those demands. There, there are equal amounts of, of examples where we don’t compete that well, globally, in the transformation or their production of goods. So, we need to look to where we want to be leaders, take care of our own house, and then push to be world leaders. Look at the, the world market, and lead the way.
Vincent Caron
On the deployment of technologies, though, because that’s, that’s something you’ve thought about a lot—and I know, David, you’ve also tried to be at the forefront there, and I know Rob, in terms of artificial intelligence, Martinrea has really been at the forefront. But…
Simon Drexler
Yeah.
Vincent Caron
…what are some of the obstacles that governments can help remove or incentives can work on? One thing that we’ve heard from businesses is sometimes just the, the ability to train people, and to pivot with technology adoption. I think we could, we could improve things on that front. What’s your take on that?
David Glover
You can always improve training. I mean, that’s key. We need key people in our industries, to survive. So, that has to be ongoing. But we also need government to understand what the bread-and-butter is of Canada. You know, for me, that’s manufacturing. I don’t see much else beyond that, in terms of bread-and-butter for the economy. So, we’ve got to make sure that government actually knows manufacturing—I’m not talking Ford, GM, or Chrysler. I’m talking the tier ones, and the hundreds of small and medium support companies that feed into that. Actually understand who you’re dealing with, that way, we can properly support it. And like Rob said, cut a lot of the fat. Get rid of a lot of the red tape and barriers, that handcuff us in doing business.
Vincent Caron
Anything that, in our tax system, we can do to get better?
Simon Drexler
I’ve always been an advocate for expanding the SHRED program.
Vincent Caron
Yeah.
Simon Drexler
So, I’ve been a, you know, fortunate beneficiary of SHRED—which, Scientific Research and Experimental Development Program, for anyone who doesn’t know—but it helps us be very innovative in Canada. Canada’s a strong innovator. We develop a lot of great technology domestically. But oftentimes, the first customer is not Canadian. And so, you have small-to medium-sized enterprises, that are investing very good resources, and very good Canadian minds, in developing world-class technology. But it doesn’t get deployed here. And so, the extension of a SHRED credit to other small- to medium-sized enterprises to do the development required for that initial deployment, I think is a tangible action that the government could take in the tax system, to incent the adoption of, of Canadian-innovated technology.
Vincent Caron
Yeah, and applied technology, right? Like, we talk a lot about AI. But really, you, you work with it every day. And you’ve been really innovative with it, at Martinrea. So, what’s your thoughts?
Rob Wildeboer
Yeah, so, so there’s great technology in Canada. We’re, we’re actually University of Waterloo Technology Innovation Partner of the Year, a couple of years ago.
Simon Drexler
Nice.
Rob Wildeboer
We have a big co-op program. But we look at ideas—and you know, our industry is very interesting, because we see all kinds of technologies. We see materials, we see AI, deep learning, and we’re doing that in our plants. At the same time, we’ve become, basically, a strategic investor in a number of different things. So, we’re the largest shareholder of NanoExplorer, which is the largest graphene producer in the world—graphene is the, you know, the strongest, lightest material in the world. We’re looking at aluminum air batteries, we’re looking at additive or aluminum powder, for additive manufacturing. Those things are being developed in Canada. But they need a partner that knows how to make things. I think that one of the—we’re pretty good at ideas. But we have some companies that are really good at saying, “We make things, and we can show you how to scale up.” And that’s your example, with the, with the medical equipment. We did masks, and we did ventilator stands, and you know, did it in a matter of a couple of weeks, and we’re outperforming what the machines say we can do. So, there are a lot of people looking for those types of partners, that can help. And I think a number of Canadian companies can essentially say, “I’m happy to be there. I know you’re looking for a cheque. But what you’re really looking for is something that we can show you how to basically get this into production, so that you can actually sell.” So, whenever I look at an innovation company, or whatever—and I used to help finance them with my law firm; a number of people are here—we basically say, do you have your first PO? Because a PO tells you…
Simon Drexler
Yes.
Rob Wildeboer
…that you have a technology someone’s willing to buy, right? And at the end of the day, a lot of people need that help, to get the PO. Whether it’s a government, or someone else.
Simon Drexler
Agreed.
QUESTION & ANSWER
Vincent Caron
Yeah. So, we have about a minute-and-a-half to go, so I just wanted to maybe go to one question from the audience, before we wrap, in terms of what our Ontario colleges can do. Ontario colleges play a crucial role in developing the advanced manufacturing talent pipelines. Giving the current state, how can employers, effectively, leverage college graduates, to make workforce needs? I mean, we’ve got a lot of learning institutions that came here today. I think everyone’s wondering, how can we support manufacturing? Anyone wants to take that one?
Rob Wildeboer
We have co-op programs. And at the end of the day…
Simon Drexler
Yeah. That’s [Indiscernible].
Rob Wildeboer
…you take someone from the classroom, put them on the line—whether it’s mechatronics or, or robotics, or deep learning—and it’s an absolutely a tremendous experience. And the interesting thing is that the real students here are not the people that come from the colleges; it’s the people in our company, that see what’s happening. And that is absolutely unbelievable. So, more of that.
Simon Drexler
I was actually going to use the same example. I think the partnerships where you’re actually deploying your students, as part of their learning journey into industry, is where you get the most value.
Vincent Caron
Yeah.
Simon Drexler
And so, usually, the recommendation I make to UW, or Conestoga, or any of the institutions I’m talking about, is that the co-op students should bring their experience back to the classroom.
Vincent Caron
Right.
Simon Drexler
Because they could actually help to give examples, and bring some of the information back from industry to the, to the academia.
Vincent Caron
Yeah. So, we always end with Dawn, so, I’ll give you final words on that. Any…
Dawn Desjardins
I know.
Vincent Caron
…other things that we can retain, from today’s conversation?
Dawn Desjardins
Well, I think the one thing is we have to remember, we are still a relatively small population. And so, even though we do and should be doing all of these things, we also have access, through free trade agreements, to 1.6 billion consumers. So, it is also reaching out, outside of Canada—developing it here, certainly, retaining all the IP we can, developing it, but also, knowing that there is, there are trading partners where we do have free trade agreements who, hopefully, will stay intact. So, yes, 77% of our exports go to the US. But we do have other potential buyers of all of the wonderful things we are manufacturing.
Vincent Caron
And on that note, thank you, everyone.
Rob Wildeboer
Thank you.
Simon Drexler
Thank you.
Vincent Caron
We’re going to stay tuned for what’s next. But I think no matter what happens, we have a strong sector here, and we’ve got resolve to work together, and to push forward. So, thank you, everyone.
Simon Drexler
Thank you.
Rob Wildeboer
Thank you.
Dawn Desjardins
Thank you.
Jenna Donelson
Thank you, everyone. Thank you to our panel—I’m going to invite you to take your seats, so you don’t have to be up on stage while I’m closing out. Let’s give them one more round of applause. Great job. Very substantive conversation. I’m thinking we should maybe have you guys back on a weekly basis, because everything’s changing so much. We’ll just have a pulse check every week. It is now my pleasure to invite our other Lead Sponsor, to deliver a few words of appreciation. Dan Nolan’s career has taken him from investment banking at CIBC and National Bank, to serving as chief-of-staff to Canada’s Minister of Finance, where he led the 2015 Federal Budget process. He’s been Vice-Chairman at National Bank, since 2017. And I’m glad he’s here today, to close out our conversation on today’s topic. Please join me, in welcoming to the stage, Dan Nolan.
Note of Appreciation by Dan Nolan, Vice Chairman, National Bank
Ladies and gentlemen, thank you very much. Thank you very much for, to the Empire Club, and for, for this event. My name is Dan Nolan, I’m Vice-Chairman at National Bank. And thank you for the insightful discussion today, on Canadian manufacturing and the economy, and exploring our rapidly-changing global landscape. Your expertise has shed light on critical issues facing Canada, in 2025. Thank you, Vincent, for moderating, and thank you, Simon, Dawn, David, and my friend, Rob, for your views.
As we’ve heard today, Canada’s manufacturing sector remains a cornerstone of our economy, with exports reaching $350 billion in recent years. However, we now face unprecedented challenges with the implementation of new US tariffs, threatening to disrupt our trade relationships, and potentially pushing us towards a recession, and rough economic times. Canada’s not diversified from the US market, and hasn’t even tried to build the infrastructure necessary to sell our products or energy to other customers. Your analysis of the impacts on various industries, from automotive and industrial manufacturing to energy, has been invaluable. You’ve highlighted how these tariffs could affect not only our exports, but also domestic prices, employment, and overall economic growth. Moreover, your discussion on Canada’s responses, and the damage that those responses could cause, could add to these challenges, and particularly, our commitment to free trade principles.
Now, it does provide a beacon of hope, in these uncertain times, that this might make us better. As we navigate this new world order, your insights will be critical in shaping policies that protect Canadian interests, while maintaining our global competitiveness. Once again, thank you for your contributions to this vital conversation. Your expertise will undoubtedly guide us, as we look to secure a prosperous future for Canada, in the face of these economic headwinds. Thank you.
Concluding Remarks by Jenna Donelson
Thank you, Dan, for those remarks, to close us out. And thank you all, for attending this afternoon. Once again, I’d just like to thank our sponsors, for making this event possible. Thank you. I’d also like to recognize a special group that we have in the room. We have our students and young leaders. We have some here from Queen’s University, and from U of T. Welcome, we’re glad you’re here. Thanks for being a part of this conversation.
To stay connected, please subscribe to our newsletter, by scanning the QR code found on your table. We have also launched our exciting Empire Club membership program. Members get exclusive discounts, benefits, premium content, and much more. So, if you are wanting to be among the first to enjoy early access, see our staff today, to sign up.
I hope that you will all join us for a few of our upcoming exciting events. On March 3rd, we’ll be hosting Ehren Cory, CEO of the Canada Infrastructure Bank. He’ll be here to have a fireside chat with Sean Speer. We’ll be getting an update on CIB’s investment progress across the country, and their conversation will be followed by a great panel discussion with energy industry innovators. They’ll be diving into the Future of Canadian infrastructure. So, mark your calendars for March 6th—or March 3rd, rather. On March 6th, we’ll be tackling another important discussion, here in Ontario: healthcare. Dr. Joss Reimer, President of the CMA, will highlight key challenges and ways to close the primary care gap, here in Canada. And Kelly Grant, Health Reporter at the Globe and Mail, will lead a conversation with Dr. Reimer, Dr. Dominik Nowak, President of the OMA, and Dr. Ojistoh Horn, President of the Indigenous Physicians Association of Canada. They’ll be all having a really important discussion on key issues in healthcare—very timely—so I hope you will join us for that event, as well.
As a club of record, all Empire Club events are recorded. They’re available to watch and listen to on our website. A recording of this event will be available shortly. Thank you all for being here today, for this important conversation. I wish you a wonderful afternoon ahead. This meeting is now adjourned.
