Sector has largely held its own, but the ups and downs are far from equal across the nation
By Jayson Myers
Ever wonder where the hotbeds of manufacturing are in Canada? The question takes on even greater significance when looking at the potential for economic growth and opportunities for well-paying jobs across the country.
While production and sales numbers are not collected at a regional level, employment numbers are, and they can tell a lot; not only about where manufacturing activity is located, but where the greatest economic value is being generated.
In 2019, 1,740,200 people were employed in Canada’s manufacturing sector. That represented 9.2 per cent of the country’s entire workforce. Employment levels dropped dramatically in 2020 as a result of the COVID-19 pandemic. Manufacturing employment fell 3.9 per cent to 1,672,900, but, manufacturing jobs did not contract as much as overall employment levels. Last year, 9.3 per cent of everyone employed in Canada held a job in manufacturing.
Central Canada accounted for almost three-quarters of Canada’s manufacturing workforce in 2020. There were 737,500 people employed in Ontario’s manufacturing sector last year – 44 per cent of the national total. Manufacturing jobs in the province were down by 3.2 per cent from 2019, and by 4.3 per cent since 2017. In Quebec, 474,000 people were employed in manufacturing in 2020, accounting for 28 per cent of the Canadian total. The province shed 4.7 per cent of its manufacturing workforce last year.
Manufacturing employment held up better in British Columbia and the Atlantic provinces. BC accounted for 10 per cent of Canada’s manufacturing workforce – or 167,900 jobs – last year, down by 2.6 per cent from 2019. The Atlantic provinces also experienced a lower-than-average decline in manufacturing jobs in 2020 with 76,700 people employed in the sector, down by three per cent from the previous year.
Prairie manufacturers suffered the biggest employment hit of all in 2020. They employed some 216,800 people last year, a 5.8 per cent decline from 2019. Still, the Prairie provinces accounted for 13 per cent of Canada’s entire manufacturing workforce, while some regions proved far more resilient than others.
Another important aspect of the distribution of manufacturing activity in Canada to take into account is the sector’s prevalence in smaller cities and towns across the country. Canada’s largest metropolitan areas – Toronto, Montreal, Vancouver, Calgary, Edmonton, and Ottawa-Gatineau – accounted for well over 40 per cent of the country’s total workforce, but for less than 38 per cent of all manufacturing jobs last year. Manufacturing in smaller cities and towns has generally proven more resilient in the face of the pandemic as well. With very few exceptions, manufacturing employment held up better outside Canada’s major urban centres than in the largest cities. Calgary was the only metropolitan area to record growth in manufacturing employment last year.
Manitoba is another exception to the trend. Manufacturing accounts for 9.5 per cent of all jobs in the province, with most of those jobs located in Winnipeg. The city is home to 64 per cent of total manufacturing employment in Manitoba, and just over 10 per cent of jobs there are in manufacturing.
South central Manitoba – extending from Portage la Prairie south to Morden, Winkler, and Altona – is another hotbed of manufacturing in the province. Almost 12 per cent of manufacturing jobs in Manitoba are located there, and manufacturing accounts for 12.5 per cent of total employment in the region. Manufacturing is also important for other regions in the province, including southwest Manitoba around Brandon and the southeast around Steinbach.
However, for most regions outside Winnipeg, manufacturing jobs are in decline. Between 2016 and 2019, manufacturing employment in all regions outside the metro area fell by 6.4 per cent, the steepest declines occurring in the southeast, south central, and Interlake regions. Southwest Manitoba is the one region that seemed to have been kicking the trend. Manufacturing jobs there increased by almost 18 per cent, before falling by more than 20 per cent last year. That’s just one indication of how COVID-19 packed a punch outside Winnipeg. Manufacturers outside the metro area shed 3,500 jobs in 2020. That’s 70 per cent of all job losses in Manitoba manufacturing recorded over the past year.
It has been a different story in Winnipeg, where manufacturing jobs grew by 8.7 per cent between 2016 and 2019. Even last year, with 38,600 jobs, there were almost five per cent more people employed in manufacturing in Winnipeg than four years previously.
Saskatchewan paints a different picture. In a province that shed 26,800 jobs last year, manufacturing employment actually increased by 1,300 or 4.3 per cent to 31,000 jobs. Manufacturing now accounts for 5.7 per cent of Saskatchewan’s total workforce.
Most manufacturing jobs are located in and around Regina (with 30 per cent) and Saskatoon (with 42 per cent of the provincial total). The metropolitan areas have also been hotbeds of manufacturing growth. Manufacturing employment in Regina has grown by 17.5 per cent since 2016. It increased by eight per cent last year alone. In Saskatoon, 31 per cent more people were employed in manufacturing jobs in 2020 than in 2016. Manufacturing employment in that city rose by 17 per cent last year.
There are other pockets of manufacturing activity across Saskatchewan – from Frontier to Assiniboia, Moose Jaw to Swift Current, and Yorkton to Prince Albert. Together these regions employed 8,500 manufacturing workers last year, 1,300 fewer than in 2019, but 800 more than in 2016.
The situation is again very different in Alberta. Manufacturers in that province had increased employment by more than 16 per cent to 135,400 jobs between 2016 and 2019. However, last year, Alberta lost 9,600 manufacturing jobs (a decline of 16 per cent). In 2020, 125,800 people were employed in Alberta manufacturing – just less than six per cent of the province’s total workforce. However, the provincial trend doesn’t tell the whole story. There have been significant differences in regional performance.
Last year’s job losses were concentrated in and around Edmonton, where manufacturing employment fell by 9,000 jobs (accounting for almost all of the losses incurred in the province). With 43,100 currently employed in manufacturing, Edmonton is still home to one-third of Alberta’s manufacturing jobs.
Calgary presents a stark contrast. Last year, 47,400 Calgarians were employed in manufacturing, representing 38 per cent of the provincial total. Calgary added 600 new manufacturing jobs in 2020, and employment in the sector is now nine per cent higher than it was in 2016.
Manufacturing employment also grew last year in the Camrose-Drumheller area, as well as in and around Red Deer. Other key areas of manufacturing activity, including Lethbridge, Medicine Hat, and the region encompassing Athabasca, Grande Prairie, and Peace River, saw a slight decline in jobs in 2020. However, since 2016, manufacturing employment outside Calgary and Edmonton metropolitan areas has increased by 16 per cent or 4,800 jobs. That represents about half of all new manufacturing jobs created in Alberta over the past four years!
Manufacturing on the rebound
Manufacturers are found across Canada. This widespread distribution of manufacturing activity gives the sector pride of place as one of the most important engines of economic development we have for communities outside our major urban areas. The importance of manufacturing as a driver of economic growth takes on greater prominence when its role and that of its employees as consumers of other goods and services is taken into account.
That’s why Prairie manufacturing will be at the forefront of the post-COVID recovery. In Saskatchewan and Alberta, manufacturers have outperformed their respective provincial economies. That’s true over the past four years and for 2020 as well. The same holds for Winnipeg, but unfortunately not for other regions in Manitoba outside that city.
Nevertheless, manufacturing remains a mainstay for local economies across the Prairies, and smaller communities are the real beneficiaries. Just over 36 per cent of manufacturing jobs in Manitoba, 27 per cent in Saskatchewan, and 28 per cent in Alberta are located outside the provinces’ major cities.
2020 was a tough year for manufacturers everywhere, but things look brighter for 2021. Let’s hope it will be the year when manufacturing rebounds and our economies can get back on track. Communities big and small stand to benefit.
Jayson Myers is CEO of Next Generation Manufacturing Canada – the country’s advanced manufacturing supercluster. An award-winning business economist and leading authority on technological change, Myers has counselled Canadian prime ministers and premiers, as well as senior corporate executives and policymakers around the world.