A factory in Windsor, Ont., on Jan. 15.IAN WILLMS/The New York Times News Service
Windsor is only a four-hour drive west of Toronto. But residents of this border city often feel forgotten by the Bay Street set.
As a who’s who of business joined Prime Minister Justin Trudeau at last week’s Canada-U.S. Economic Summit in Toronto, Windsorites were preparing for their city to become ground zero for an impending trade war with the United States.
There is widespread agreement in this southwestern Ontario city that its competitiveness as a manufacturing hub risks becoming permanently damaged by the fallout of U.S. President Donald Trump’s tariff threats.
Some 42,300 people were employed in manufacturing across the Windsor-Essex region at the end of 2024, marking a 32-per-cent increase on a year-over-year basis, according to data from Statistics Canada. In fact, manufacturing employment ended last year at a multiyear high.
That’s why local business leaders are urging the rest of corporate Canada to support their call for the creation of a bold industrial policy for the manufacturing sector as Ottawa plots a new prosperity agenda for the country.
“Canadian manufacturing is a very, very tough business right now,” said Bethany Toldo, president of Centoco Plastics Ltd., a plastic injection moulding company.
“Attracting talent and making it a place where people want to work, and have pride in, is important.”
Although Canada has spent decades bemoaning the loss of manufacturing jobs to lower-cost jurisdictions, including Mexico and China, successive federal governments have failed to formulate an ambitious vision for the sector.
The Trudeau government, which has been in power for nearly 10 years, has appeared allergic to crafting a robust manufacturing policy. It has instead focused on piecemeal initiatives, such as investment tax credits, even though it has acknowledged that Canadian workers need “a real muscular industrial policy” with a multiyear time frame.
That cognitive dissonance reflects the Liberal government’s general disinterest in business issues and its singular focus on the green agenda.
The U.S., meanwhile, has doubled down on industrial policy in recent years, largely in a bid to enhance its market standing vis-à-vis China.
By vowing to return America to a “golden age” of manufacturing, Mr. Trump is simply picking up the baton from his predecessor. Former president Joe Biden’s industrial policies included strategic U.S.-centric investments in the auto sector and to shore up the domestic supply of microcontroller chips.
Other countries, including India, Japan and members of the European Union, have also sharpened their focus on industrial policy.
The best trade retaliation? Hit the U.S. with a carbon-tax tariff
Now is the opportune time for Canada to do the same. Manufacturing accounts for 68 per cent of Canada’s merchandise exports and contributes roughly 10 per cent of Canada’s gross domestic product.
What’s more, some 1.7 million people across the country are employed in a wide range of manufacturing industries spanning everything from aerospace to pharmaceuticals to fuel cells.
To be clear, Windsorites are not talking about resurrecting a manufacturing sector of yore. Rather, they are calling on Ottawa to think beyond the current crisis and create the right conditions for more investment and high-skilled jobs.
Canada requires a panoptic policy that addresses issues such as diversifying foreign market access for exports and attracting more foreign direct investment. Such a strategy also hinges on immigration, innovation, infrastructure, tax policy reform and Ottawa’s foreign policy with China.
Provinces also have a role to play by dismantling internal trade barriers, funding postsecondary education and reinforcing the social safety net, including universal health care.
“We have been advocating for a long, long period of time that the government should have an industrial strategy on a bigger scope,” said Emile Nabbout, president of Unifor Local 195. (Disclosure: I am a member of Unifor at The Globe and Mail.)
“In the absence of an industrial strategy, it’s a free-for-all.”
An industrial strategy would also help domestic manufacturers make better use of foreign trade deals.
“As a small business, it’s difficult to figure out how you can crack those other markets,” said Christopher Kruba, who is Centoco’s counsel. “It just hasn’t been a big focus of government.”
Laval, a manufacturer of equipment and auto parts, is considering expanding its businesses outside of Canada. The U.S. is just one jurisdiction under consideration.
“India might be a good option,” said company president Jonathon Azzopardi. “India might have its issues, but it also doesn’t have Trump.”
Indian Prime Minister Narendra Modi, who was in the United States on Thursday, is advancing his “Make in India” initiative at home.
“They want you to be in India,” said Mr. Azzopardi. “Small businesses will struggle with that. Large businesses stand a better chance.”
Canada, though, has a high proportion of small and medium-sized businesses – making it essential for governments to help them overcome such barriers.
Bay Street can also help by using its outsized influence in Ottawa to ensure that an ambitious manufacturing policy is key to Canada’s prosperity agenda.
“To the broader business community, ensure that Canada does reach down to Windsor,” said Ryan Donally, president and chief executive officer of the Windsor-Essex Regional Chamber of Commerce. “We do feel, at times, on a bit of an island down here.”