Federal documents are expressing that, amid hopes that Canadian manufacturing will drive economic growth in a country reeling from low oil prices, the sector's rebirth is contending with "significant" structural obstacles.
In a recent memo addressed to Economic Development Minister Navdeep Bains, advisers point to industry hurdles that include low productivity, poor innovation, a failure to scale up and weak participation in global value chains.
The briefing note goes on to say that the fate of Canadian manufacturing will have consequences that reach beyond the industry.
Manufacturing accounts for nearly 11% of Canada's growth — as measured by gross domestic product — and employs 1.7 million people, the memo says.
The document was prepared for Bains as he took over the cabinet post in November, and could help guide Bains's decisions and also influence the federal budget, expected late next month.
The Liberal government has been exploring ways to address the economic shock of sliding commodity prices, which have hit the economy hard — particularly in the oil sector.
The slump forced the economy to contract over the first half of 2015 — in large part because non-energy sectors were very slow in picking up the slack.
Many experts had been expecting the exchange rate, which has dropped along with oil prices, to help revive exports and the manufacturing industry.
