Staying at home can pay off for Canadian manufacturers

Despite the continuing globalization of manufacturing, sometimes you still don't have to look any further than the equivalent of down the street to find your next opportunity for business.

According to a recent report from the Canadian Energy Research Institute (CERI), one such opportunity is the crown jewel of Alberta's burgeoning resource sector-the oil sands. In fact, the study entitled, ''Spreading the Wealth Around: The Economic Impact of Alberta's Oil Sands Industry,'' predicts that oil sands investment could result in a windfall of business for manufacturers across Canada during the 2000-2020 period.

''In CERI's relatively conservative base case scenario, investment of approximately $100 billion directly generates oil production worth about $570 billion-and in the process creates gross domestic product (GDP) increases of $885 billion, 6.6 million person years of employment, and $123 billion of government revenues,'' Dr. Govinda Timilsina, who led the CERI research team that conducted the study, said in releasing the results.

The fruits of oil sands investment, he continues, won't be enjoyed just by Alberta's manufacturing sector. ''These benefits are spread wide and far-Ontario, Quebec, other provinces, municipalities, and the various levels of government in Canada, as well as to other countries- and across many sectors of the economy.''

For the study, CERI analyzed the potential economic effects of the ongoing development of Alberta's oil sands looking at three main impact areas: GDP, employment (including labor income), and government revenues in several scenarios.

The methodology used for the study saw CERI develop Input-Output models for Alberta, Ontario, Quebec and the rest of Canada. Each model was composed of 19 sectors and 19 commodities and segments the upstream energy industry into coal mining, natural gas, and crude oil and oil sands.

According to the CERI study, oil sands development will have a dramatic impact on GDP. ''The oil sands activities would add approximately $789 billion to Canadian GDP. The total GDP impact in Alberta, $634 billion, is more than three times as high as the province's 2004 GDP, which equalled $187 billion. Similarly the GDP impacts in Ontario ($102 billion), Quebec ($8 billion) and the rest of Canada ($45 billion) represent 20%, 3.1%, and 14% of their corresponding GDP levels in 2004 respectively. A significant portion of the total impacts on GDP, 11%, would occur in other countries.''

Turning to impacts on employment and labor income, the study states that oil sands activities would generate employment in Canada equal to 5.4 million person years, leading to a corresponding increase in labor income of $259 billion. ''Within Canada, Alberta will see the highest increase in employment as well as labor income. Approximately 68% of the total jobs created within Canada (3.6 million person years) would be created in Alberta.''

''About one million person years would be created in Ontario, 125,000 person years in Quebec, and 612,000 person years in other parts of Canada. While the crude and oil sands sector would see the largest job creation, jobs created in other sectors, such as manufacturing and retail, would be substantial,'' the study says.

The impact on government revenues across Canada will also be substantial, the study points out. ''The total revenues accruing to varius govenments in Canada are estimated to be $123 billion. Of the total revenue collected in Canada, the federal government would receive 41% ($51 billion), the Alberta provincial government 36% ($44 billion), the other provincial and territorial governments 9% ($12 billion), and municipalities 14% ($17 billion).''

That's a lot of opportunity for Canadian manufacturers and they don't even have to leave home to
pursue it.

Jerry Cook
Editor, MPP
jcook@clbmedia.ca 

Advanced Fabricating wins TRUMPF award

TRUMPF Inc., Farmington, CN recently presented Mississauga, ON-based Advanced Fabricating Machinery Inc. with its Outstanding Distributor Performance Award. The award recognizes Advanced Fabricating's exceptional performance in selling TRUMPF products during the past fiscal year.

Other companies recognized by TRUMPF included Hart Machine Tool Inc., Tuscumbia, AL which received the Sustained Excellence Award in recognition of their consistent performance in selling TRUMPF products and TESCA of Monterrey, Mexico was presented with the Most Improved Performance award for the firms efforts in increasing sales and support during the past fiscal year.

The TRUMPF Group closed its fiscal year 2005/06 on June 30, 2006 with record sales and record orders received. Sales rose by 18 percent to 1.65 billion Euros / 2.01 billion US-Dollars. The laser and machine tool manufacturer realized an even bigger growth in orders received: approximately 20 percent to 1.76 billion Euros / 2.14 billion US-Dollars.

Coming in the September issue of
MP&P

Special Features

• Weld Expo Preview

• CNC Machine Tools

• Fabricating/Forming

• Robotics/Automation

• EDM

Regular Departments

• Software Solutions

• Welding Zone

Automotive Parts Manufacturers Association of Canada - This site is an information resource for Canadian OEM producers of parts, equipment, tools, supplies and services to the automotive industry. www.apma.ca

Canadian Machine Tool Distributors Association - A resource for Canadian machine tool distributors. www.cmtda.com

Canadian Welding Association - Information resource for the Canadian welding industry.
www.cwa-acs.org

Lincoln Electric Company - Register online for access to the latest news from the Lincoln Electric Company and receive you copy of iWeld eNewsletter. www.lincolnelectric.com

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