Competitiveness and Trade related articles

Exports of chemical and plastic products continue to recover towards end of 2020

Chemical and plastic products continued to recover as 2020 wound to a close. Strong demand as economies re-opened in the summer and fall of 2020 brought chemical and resin inventories to their lowest levels in several years. Trade data from November shows exports of commoditized chemicals having their strongest end to a year in some time. The graphs below show the export volumes of some of Canada’s commoditized products through November.

On an aggregate level we are seeing the value of exported chemical and plastic products exceeding 2019 levels as we ended 2020. The American Chemical Council is a seeing similar trends to start the year.

Significant differences underlie these aggregate trends. Products whose downstream sectors remain deeply impacted by COVID-19 (auto manufacturing, oil and gas drilling, paper product manufacturing, and travel, as examples) or those continuing to face overcapacity or logistical pressures are further back in the recovery. Plastic Product manufacturers were severely impacted in the spring of 2020 by lockdown restrictions but since then, exports have reach multi-year highs. Strong demand from nearly all sub-sectors have been seen in the fall with auto parts and construction materials showing some counter seasonal trends this year.

Looking ahead

A crucial trend for 2021 will be further price strengthening accompany the strong demand. A large share of the gains seen in the graphs above are from volumetric gains. Margins remain compressed across a wide variety of chemical products. During third-quarter earnings calls in October 2020, several CEOs expected global chemical demand to remain tight through early 2021 with the normally slower winter months used to rebuild inventories and hopefully providing a boost to prices and seasonal demand normalizes in the Spring of 2021.

 

CIAC, 60+ Leading Business Organizations Call on Government to Protect Jobs and Postpone Non-Essential New Measures

As the COVID-19 pandemic grew (and continues to grow in Canada) CIAC joined dozens of Canada’s leading business organizations in calling on government to move swiftly in enacting measures to protect businesses, jobs, and the economy. The combined efforts helped ensure the government moved forward with implementing numerous mechanisms to help ensure Canadians and businesses will weather the storm, and CIAC encourages governments of at all levels to make the necessary steps to ensure essential businesses, such as the chemistry sector, continue to operate so they can get their essential products can continue to serve Canadians

Read the joint statement

CIAC applauds further Ontario government actions to cut unnecessary red tape

The Chemistry Industry Association of Canada (CIAC) congratulates the Ontario government and the Honourable Prabmeet Sarkaria, Associate Minister of Small Business and Red Tape Reduction, on the release of its latest regulatory burden reduction action.

“CIAC firmly supports the Ontario Government’s commitment to streamline duplicate regulations that impact the competitiveness of the chemical manufacturing,” said Don Fusco, CIAC Director, Government and Stakeholder Relations, Ontario. “These measures that affect the chemistry sector will eliminate unnecessary cost, complexity and time, while protecting our health and the environment.”

Among the initiatives contained in the Better for People, Smarter for Business Act, 2019, CIAC is very pleased to see the province:

  • Repeal Section 34 of the Occupational Health and Safety Act, eliminating duplicative federal notification requirement for introducing new chemicals.
  • Revoke outdated acetone reporting requirements while maintaining stringent local air quality regulations.
  • Create an electronic system to allow businesses and governments to better track and report on hazardous wastes.

CIAC member operations are governed by Responsible Care®. The UN-recognized initiative compels member to innovate for safer and greener products and processes and continuously improve their environment and community protection, employee health and safety, product stewardship and social engagement.

Ontario’s $24-billion chemistry industry is the third-largest manufacturing industry and second largest exporting sector in the province. Overall, the chemistry sector directly employs 46,000 Ontarians in well-paying jobs and supports another 220,000 jobs in other sectors. The sector provides important inputs to sectors such as automotive, forestry, construction, and food and beverage.

CIAC is pleased to continue to work with the government on the many priorities to modernize business regulations to be outcome-focused and evidence-based while continuing to protect the public interest.

CIAC welcomes Alberta Government’s announcement to continue building on the success of the Petrochemicals Diversification Program

October 23, 2019

The Chemistry Industry Association of Canada (CIAC) is very pleased that the Alberta Government has confirmed its $1.1 billion commitment to the second round of funding for the Petrochemicals Diversification Program (PDP2).

PDP2 supports privately funded large-scale projects by providing royalty credits to companies that build facilities to turn ethane, methane, and propane feedstocks into products such as plastics, fabrics and fertilizers. Royalty credits are issued once projects become operational.

“We are very pleased that Alberta is committed to moving forward with this program. The first round of PDP provided $500 million-worth of royalty credits that resulted in over $9 billion of new chemistry investment now underway in Alberta. This announcement will allow Alberta to sustain the momentum, attract billions more in much-needed investment and create good-paying jobs while adding value to Alberta’s world-class, low-carbon energy resources,” said Bob Masterson, President and CEO of CIAC.

Under PDP2, Alberta received 20 additional applications, totalling close to $60 billion in proposed investment. In continuing the PDP2 program, Alberta stands to realize more than $20 billion in incremental investment.

“CIAC congratulates the government on moving forward with PDP. We will continue to work collaboratively with all stakeholders, especially the Alberta Government, to develop a long-term framework in Alberta of transparent and predictable investment supports that levels the playing field for new investments in Alberta,” Mr. Masterson said.

Chemistry industry seeks innovation fund for plastics recycling technology in federal pre-budget submission

August 6, 2018

On August 2, the Chemistry Industry Association of Canada asked the Government of Canada to commit to the establishment of a new Plastic Technology Innovation Fund (PTIF) to promote the research and development of ground-breaking technology in plastic recycling and recovery innovation as part of its pre-budget submission to the Standing Committee on Finance and Economic Affairs.

The fund would include an initial allocation of $200 million and Natural Resources Canada would be responsible for assessing applications from the private sector and research communities for innovation in areas of product design and advanced plastics recycling and recovery such as chemical recycling, pyrolysis, gasification and energy recovery.

“There is no ‘one-size fits all’ solution to managing plastic waste. A variety of technologies and approaches will be needed to keep plastic waste out of the environment and in the economy,” said Bob Masterson, President and CEO of CIAC. “The innovation and ingenuity of the chemistry sector will be key in solving this problem.”

Other highlights of the submission include CIAC’s request for the reform the Federal Scientific Research and Development (SR&ED) program to help foster research and development in Canada. These reforms include:

  • raising the investment tax credit to 20 per cent from the current 15 per cent;
  • eliminating or substantially raising the upper limit for taxable capital phase-out range from the current $50 million; and
  • reinstating capital expenditure eligibility that was phased out beginning January 1, 2013;
  • eliminate the 20 per cent disallowance on arm’s-length consulting payments.

The SR&ED program provides more than $3 billion annually to over 20,000 claimants and is administered by the Canadian Revenue Agency. The proposed changes to the SR&ED program are required to ensure that Canada remains a destination for global research mandates.

Finally, the CIAC is proposing the Federal Government re-authorize the existing funding for the Chemicals Management Plan (CMP) and specifically develop and expand all aspects related to international development to share Canada’s expertise.

To read the full submission, please see: The Chemistry Industry 2020 Federal Pre-Budget Consultation Submission to the Standing Committee on Finance and Economic Affair

 

CIAC holds press conference on the proposed Clean Fuel Standard

On April 9, CIAC held a press conference and met with numerous government official to sound the alarm on the Government of Canada’s proposed Clean Fuel Standard (CFS).

To start out the day, CIAC Chair and President of BASF Canada, Marcelo Lu and CIAC President and CEO Bob Masterson held a press conference to the Parliamentary Press gallery explaining the industry’s position and concerns regarding the CFS.

The CFS as currently designed will be the first standard in the world to include industrial natural gas and propane. The Government of Canada has proposed a phased-in approach targeting liquid fuel in 2022. If implemented as proposed, the CFS will push the total carbon price in excess of $200 a tonne, effectively doubling the cost of natural gas for the industry.

Receive our weekly e-newsletter with the latest news on the chemistry industry in Canada.

Select list(s) to subscribe to

ajax-loader