Driven by Chemical Products, Manufacturing Sales Pick Up in November

Key Insights

Manufacturing sales ticked up in November, reversing some of the sharp decline in October. Sales of chemical products added to topline growth with Statistics Canada noting that several petrochemical plants came back online after being shut down since September. Motor vehicle manufacturing sales fell as retooling at a major Ontario facility curbed production. Food manufacturing sales also fell for the second consecutive month.

The federal government’s recently completed Electric Vehicle Availability Standard will have significant bearing on the future of manufacturing in Canada. The standard outlines some of the government’s priorities in the electric vehicle (EV) transition and reconfirms its adoption timeline. By 2026, 20 per cent of all new light vehicle sales must be zero-emission vehicles (ZEVs). By 2030, this share must be 60 per cent and, by 2035, all light vehicle sales must be ZEVs. Canada is making progress towards these targets. In the third quarter of 2023, ZEVs represented 12.1% of all new motor vehicles registered in Canada. Sales have been particularly robust in provinces with additional incentives for EV purchases.

However, Canada’s EV targets could lead to missed opportunities for domestic manufacturing. The affordability of EVs remains a concern, as fossil fuel-burning vehicles are generally cheaper relative to domestically produced EVs. If affordability and availability challenges cannot be solved within the federal government’s adoption timeline, this could lessen the benefit to Canadian manufacturers. Lower-cost foreign producers like China could gain if they are implicitly enlisted to help meet these targets. Canadian governments are certainly trying to help domestic producers capture some of the benefits, offering billions worth of incentives to attract investment in the emerging EV supply chain. However, unless production capacity in Canada is increased and prices fall, these mandates may not be reachable without imported makes and models.

For more details about Canadian manufacturing and industrial trends, please explore our Industry Lens reports here.