Op-ed: Feds should pay more attention to Canada’s chemistry sector says CIAC President
April 20, 2017
On April 10th, 2017, the Hill Times published an opinion piece titled: “Feds should pay more attention to Canada’s chemistry sector,” by CIAC president and CEO Bob Masterson. This is the op-ed reproduced in full.
As the Liberal government looks to attract considerably higher rates of foreign investment into innovative sectors with high growth prospects, significantly more coordinated attention needs to be paid to Canada’s chemistry sector. There are immediate opportunities to attract more than $11-billion in investments through four global scale projects. These projects would create hundreds of jobs, drive economic growth, and help the government reach its environmental targets. It is nearly certain that none of the anticipated, nor possible future projects, will advance without the direct involvement of the Government of Canada.
The chemistry industry is a proven solution to all the government’s objectives and with similar federal involvement in the chemistry sector investments the Liberals will be able to tick off not only a small win for themselves, but most importantly, for Canadians.
Globally, the chemistry industry is a large, fast growing industry providing critical inputs to 95 per cent of all manufactured goods on this planet. In Canada, chemistry is the fourth largest manufacturing sector with more than $55-billion in annual shipments, and is the second largest manufacturing exporter with 70 per cent of all shipments traded internationally. Structured in highly efficient and consolidated clusters, such as in Sarnia, Ont., and Fort Saskatchewan, Alta., the sector adds significant value to Canada’s energy and agricultural resources. Canada’s chemistry sector is also highly skilled. Thirty-eight per cent of the sector’s 90,000 employees hold university degrees, second only to Canada’s IT sector, and earn average annual salaries twice that of Canada’s manufacturing sector.
Contrary to misconception, the industry is also highly supportive of climate action. More than 30 years ago, Canada’s chemistry industry, with the assistance of its toughest critics, developed the Responsible Care initiative. Born in Sarnia, Responsible Care® is now a global success story practised in 62 countries around the world. Since 1992, Responsible Care® has driven significant improvements in the environmental performance of the sector, including the reduction of absolute green house gas (GHG) emissions by 68 per cent and a decrease in the release of toxic substances by 86 per cent. In turn, the industry is also the central solutions provider for innovative emissions reductions activities in other sectors, including transportation, buildings and agriculture.
Unfortunately, despite its proven track record on providing thousands of Canadians with high-paying jobs, adding billions to the Canadian economy, and reducing GHG emissions on its own, Canada has struggled to attract global investments in chemistry due to a lack of support from the federal government. Over the past five years, more than 300 global scale projects worth over $US 250 billion have been completed, are underway, or have been announced in North America, with 70 per cent of those representing foreign direct investment. Nearly all those investments, however, have occurred in the United States. Canada is lagging far behind its historical 40-year performance which traditionally saw our country capture a 10 per cent share of all North American chemistry sector investments. Canada should have had at least 30 global scale investments worth over $30-billion, but this has not been the case.
Despite limited investment success to date, Canada does have many of the key ingredients for investment success in place—established and highly integrated clusters, a talented workforce, access to low-carbon, cost-advantaged feedstock, and proximity to key markets. The Governments of Ontario and Alberta have identified this economic potential and have taken the lead on attracting billions in investments. Ontario’s $2.7-billion Jobs and Prosperity Fund identified chemistry investments as a priority sector and Alberta launched the Petrochemicals Diversification Program which attracted 16 proposals worth over $20-billion. Currently, there are two projects in Sarnia and two in Fort Saskatchewan with total value of over $12-billion that are targeted for provincial investment support. Without sustained federal engagement in the sector and these projects, however, they face steep odds to advance.
The federal government’s interest and involvement is urgently needed if we are to have a reasonable chance for successful final investment decisions in 2017. If we can be successful in attracting these large-scale investments, it is calculated that the sector has further opportunities to attract an additional $10-billion to $20-billion in future years. As the Liberal government continues to balance climate change targets and economic goals, Canadians are continuously looking for greater opportunities. Last week the prime minister was in Windsor to announce his government’s financial support for Ford, amounting to $1-billion in investments. That pales to the opportunities that are sitting at Finance Minister Bill Morneau’s and Innovation Minister Navdeep Bains’ doorstep. The chemistry industry is a proven solution to all the government’s objectives and with similar federal involvement in the chemistry sector investments the Liberals will be able to tick off not only a small win for themselves, but most importantly, for Canadians.