Canadian Packaging

Talking Tough


October 27, 2008
by George Guidoni

It is a long-enduring quirky legacy of Canadian manufacturing that the industry never gets its due respect and credit for the vast and critical contribution it makes to the country’s economic health and prosperity that it truly merits—until the sector gets caught up in a downturn spiral threatening its very existence.

Although never fully recovered to former glories since the last serious North American recession of the early 1990s, Canada’s manufacturing community has since displayed remarkable resilience in the face of emerging new global competition in their own established markets, accentuated by an equally remarkable transformation from an assortment of free-trade skeptics into one of the word’s leading cheerleaders for greater global trade liberalization.

But even for the veterans and survivors of the nasty “manufacturing hollowing out” in the early 1990s—when a US90¢ dollar was widely decried as the beginning of the end of Canada’s competitive advantage in goods-producing industries—today’s toxic mix of dollar exchange parity, out-of-control energy costs, sinking consumer confidence and purchasing power, and a morbidly growing list of plant closures and layoffs sets a new benchmark for just how fast things get so much worse.

This month’s announcement of a plan to shut down a General Motors of Canada’s pick-up truck plant in Oshawa, Ont.—a huge blow to the local economy with the loss of 2,600 well-paid manufacturing jobs—is only the latest in a troubling continuation of a prolonged erosion of Canada’s manufacturing workforce, estimated to have shrunk by 400,000 people since 2004.

Naturally, none of this is good news for Canada’s packaging industry—a diverse mix of packaging manufacturers, distributors, converters, marketers and designers whose own economic well-being is integrally linked with the health and welfare of Canada’s goods-producing industries, especially in the consumer packaged goods (CPG) segments.

Over the last year or so, many Canadian-based producers of boxes, containers, films and other packaging used to ship Canadian-made food-and-beverage, personal-care, pharmaceutical and other products into domestic and export markets have been rocked by the relocation of some major production and filling lines to lower-cost locations in the U.S. or even Mexico, in some cases, prompting new fears over the long-term health and viability of Canada’s manufacturing base and its packaging suppliers.

And with the long-term well-being of this publication likewise intrinsically linked to the eventual outcome of this uncertain and worrying outlook, the Canadian Packaging magazine’s third annual Executive Roundtable forum—held last month at the downtown-Toronto headquarters of Rogers Publishing Limited—was suitably structured to obtain a more reality-grounded collective consensus of just how much worse things are likely to get for Canada’s manufacturing sector, and if indeed it’ll get better eventually this time around.