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COVID-19 takes toll on Canadian equipment manufacturers


January 19, 2021
By AEM

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The COVID-19 pandemic has taken a toll on equipment manufacturers in Canada, according to a new survey released by the Association of Equipment Manufacturers (AEM). For example, nearly half (forty-seven percent) of equipment manufacturers in Canada surveyed said it will take a year or more for their organizations to recover to pre-COVID business levels.

“The COVID-19 pandemic has clearly impacted equipment manufacturers and the communities we proudly serve across Canada,” said Alexander Russ, Director of Government Affairs for AEM. “From new orders drying up to supply chain disruptions, this unprecedented crisis has caused many companies to reduce their immediate financial outlook. AEM continues to help our industry navigate these challenging times to come back stronger and fuel Canada’s economic recovery.”

As the country navigates the ongoing COVID-19 pandemic, equipment manufacturers, suppliers, and distributors have largely remained open and continued to supply the equipment necessary to keep the country moving forward and help lead the recovery and renewal of the Canadian economy.

The survey was in the field from June 22 to August 5, 2020. The 24 respondents weighed in on the effects of the COVID-19 pandemic on the economy, the industry, their companies, supply chain and manufacturing operations, their financial expectations, as well as the challenges they continue to face and specific ways the federal government can keep equipment manufacturing strong and ensure the nation’s economic resilience.

Key Findings

  • Nearly half (forty-seven percent) of equipment manufacturers in Canada surveyed said it would take one year or more for their organization to recover to pre-COVID business levels.
  • More than three out of four equipment manufacturers in Canada surveyed identified a decrease in demand (new orders) as the primary impact of COVID-19 on their business and manufacturing operations (seventy-six percent). Four out of ten (forty-three percent) respondents identified supply chain issues as a major impact.
  • Fifty percent of Canadian equipment manufacturers say they have used or intend to use Canada’s federal COVID-19 assistance programs to help their business, with the other fifty percent saying they haven’t or will not.
  • Of the equipment manufacturers in Canada accessing the Canada Emergency Wage Subsidy (CEWS), fifty-five percent said it was “easy” while twenty-two percent said it was “relatively easy,” and another twenty-two percent saying it was “moderately difficult.”

The top additional policies equipment manufacturers believe the Government of Canada should undertake to help their businesses through the COVID-19 crisis are recognizing the critical importance of Canadian manufacturing capacity, implement measures to increase the competitiveness of the sector, and reward innovative Canadian manufacturers (sixty-five percent), investing more federal money in infrastructure projects, including increasing the federal portion of funding for provincial and municipal projects (sixty percent), and creating a program to replace older equipment with new, lower emission equipment through tax credits or government grants and loans (sixty percent).

AEM continues to lead the industry’s response to the COVID-19 pandemic and is working closely with Canadian officials to keep the equipment manufacturing industry in Canada strong and ensure the nation’s economic resilience. AEM is calling for bold action by the Canadian government to incentivize the further development of the equipment manufacturing industry in Canada, and to provide additional economic assistance to businesses of all sizes.