Canadian outsourcing has changed over the years as companies compete in the global market. The challenge is finding the companies that manufacture their product here in Canada. As businesses attempt to get a foot hold in the success of their products, outsourcing is just too tempting as they capitalize on the inexpensive labor and material costs outside of the country. I believe we need to try to reward the ones that are committed to Canada and Canadians as much as we can.
The beginning of manufacturing in Canada was in the early 18th century when grain was processed into flour in a place known as New France which became Quebec in 1763. Indigenous people actually ground plants by hand to make the same type of ingredients before Milling technology arrived via Europeans in the middle of the 16th century. Prior to that, you could say that outsourcing was standard. Canada was actually a hotbed of manufacturing activity until early 2000 when regulations in Canada were reduced and outsourcing became more prominent as more companies moved their production overseas. This shift in North America began in the 1970’s with China and India becoming the top destinations for textile products. America was the first substantial outsourcer with companies such as Apple, Nike, Cisco Systems, Walmart and IBM being among the most outsourced.
As Canadian outsourcing increased, we witnessed more and more popular clothing stores moving their production overseas to save money. I don’t know about you but I find this practice disappointing and worse yet, hard to get away from when thinking about purchasing a new shirt or pair of shoes. Outsourcing is not only a factor in the Canadian economy and employment numbers. More and more the discussion is not only on safety standards, but also on a growing concern about what is happening to the environment. Regulations in many of the regions outsourced to are either very minimal or even non existent.
In addition, something that we do not always consider, is that this money saving tactic is not just making Canadian companies more prosperous in the short term. While it is thought of as a win in the stock numbers for Canadian companies, at the same time they have in fact contributed the growing economy of these countries such as China who according to National Master statistics went from only 14% higher consumer spending in 1970 to exceeding our consumer spending 3 times by 2014.
Not All Bad
Canada is still a strong producer in many industries where the product materials are in abundance here. For this reason these products are also among Canada’s largest exports. The most prominent products are in the following industries:
The good news is that according to a PLANT article, in 2018, manufacturing did in fact grow at almost 10% which is very good. It’s possible that as the economy is changing and industries around the world are suffering, Canadian companies are staying closer to home where things are more predictable. As we can guess though as a result of the steel and aluminum tariffs and trade fights with you know who, the auto industry has suffered.
Canada is also attempting to become an outsourcing destination for other countries in addition to retention incentives. Some incentives include:
- Intellectual Property Protection
- Low Dollar
- Emphasis on Reputation
- Tax incentives
- Pension portability
Wouldn’t it be nice if Canadian companies could be more interested in developing their own economy and furthering the success of Canadians than lining their pockets? I find that as we see the gap between the stupidly rich and the financially challenged widening, the profit focus that we hear about every day is getting more and more frustrating. I mean really, how much is enough, and why do we give accolades to these companies that maybe provide money (that is written off) for a project and yet treat their employees worse and worse every year by cutting and avoiding benefits while outsourcing their goods to the cheapest bidder.
The outsourcing is not limited to product manufacturing but as we all know, the service industry is also making use of this very accessible product. We have unfortunately grown accustomed to talking on the phone to someone from another country when we are placing our order for our favorite pizza. What I am saying is that I believe there is no reason for thriving corporations to outsource so much.
We are seeing more and more consumer resistance to political issues around the globe. What if we could see more of that when it comes to canadian outsourcing by multi million and billion dollar companies. One way we can resist the trend is by purchasing Canadian products when we can, It is not always easy and some products are not available here, however with the number of sites promoting Canadian products and the flag showing up on the shelves more often, it is definitely getting easier. Check out what we have so far.