Despite the economic slowdown observed in Quebec, manufacturing companies will still have to deal with the labor shortage in 2024. The use of temporary foreign workers will remain essential to ensure the sustainability of their operations, and limiting the entry of these workers into Quebec, as François Legault wishes, would therefore not be a good idea.
This is what we can understand when reading the memorandum that Manufacturiers et Exportateurs du Québec (MEQ) will soon present to the Minister of Finance, Eric Girard, as part of its pre-budget consultations which are beginning with a view to the 2024 budget. -2025.
The year 2023 has not been easy for the industrial world, which has had to deal with the uncertainty generated by high inflation and rising interest rates. If we see a lull in these two sources of concern, we wonder about the effects and duration of the economic slowdown.
PHOTO DAVID BOILY, LA PRESSE ARCHIVES
The president of Manufacturers and Exporters of Quebec (MEQ), Véronique Proulx
But MEQ’s major concern remains the labor shortage which will continue in 2024 despite the economic slowdown or a technical recession.
The labor shortage is still the main obstacle to growth in the manufacturing sector. The economic impact is very real, and has been everywhere across Quebec for several years.
Véronique Proulx, president of Manufacturers and Exporters of Quebec (MEQ), in her memorandum to the Minister of Finance
Quebec manufacturers are entering the year 2024 with a deficit of 20,000 positions to be filled throughout Quebec.
The situation has improved slightly since in 2018, manufacturing companies totaled 14% of all vacant positions in Quebec and this percentage has fallen today to 10.6%, which nevertheless remains significantly higher than in Ontario and the rest of Canada.
This inability to fill available positions is costly for companies in the manufacturing sector, particularly those with fewer than 100 employees, according to a survey recently conducted for MEQ.
Thus, nearly 60% of manufacturing companies in Quebec must refuse contracts, make fewer submissions or collect financial penalties for delivery delays, due to a lack of personnel to carry out the appropriate tasks.
This is why manufacturing companies must turn to greater automation, better training of their employees and international recruitment to fill an increasingly large part of their workforce needs.
Essential temporary foreign workers
The manufacturing sector is now the second economic sector that uses temporary foreign workers the most in Quebec, after agriculture, forestry, hunting and fishing.
In five years, manufacturing companies have multiplied by 13 the number of temporary foreign workers in their employ: they went from 1,108 in 2017 to 14,796 in 2022. A figure which will certainly increase further in 2023 when the needs have been further screaming throughout the year.
Not only do 60% of companies lose contracts due to staff shortages, but 35% of them find that this shortage has harmful effects on the mental health of their employees.
In short, manufacturers still want access to international recruitment to meet their immediate labor needs that they are unable to fill with the local population.
There are 14,000 manufacturing companies in Quebec, 13,000 of which have fewer than 100 employees. The sector which has already hired more than 630,000 people at the beginning of the 2000s today has just over 500,000, but the contribution of the manufacturing sector to Quebec economic activity has continued to decline over the of the last 20 years.
In 1998, this sector contributed more than 20% to Quebec’s GDP. During the decade of the 2000s, with the irrepressible rise of China, this contribution fell to 14.5% in 2010 and only represents 12.6% of Quebec’s GDP today.
The manufacturing sector still accounts for 87% of Quebec’s total exports with sales of 213 billion in 2023, but its contribution could be significantly greater if the sector returned to its levels of 20 years ago.
In an interview she gave me in 2013 when she was CEO of Rio Tinto Alcan, Jacynthe Côté rightly pointed out that when the contribution of the manufacturing sector falls below 20% of GDP, it affects the entire economy. of the country which is weakened.
At the time, she compared the situation in Germany, with its industrial sector accounting for more than 20% of its GDP, to that of other European countries, which were struggling.
Companies must increase their productivity by further automating their operations and digitizing their industrial processes, they must innovate and modernize, but they must also count on flesh-and-blood employees to orchestrate all this activity, and on hands to do operate the machines.