Flaherty expects manufacturing sector to shrink

Finance Minister Jim Flaherty predicts that the manufacturing sector will shrink as a percentage of the Canadian economy.

I’ve been fearing that manufacturing will shrink for some time.  Energy scarcity and corresponding high energy prices are likely to shrink industry for the foreseeable future until we develop a new, post-carbon energy system.  I feared that the pressure to reduce emissions might put a further squeeze on manufacturing.  But I’m glad Mr. Flaherty said it first.

I’m glad because if Conservatives and Greens can agree that there is likely to be a shrinkage in the manufacturing sector, then we can get beyond that worry and start planning how to sensibly reconsider what it is we’re manufacturing.  If we can’t expect to grow our manufacturing capacity, and indeed must expect it to shrink, then it becomes critical that we reconsider what it is we’re going to give up if we start manufacturing for the green economy, which we need to plan for if we want any future for manufacturing at all.

We’ll urgently need to make wind turbines, solar panels, insulation, rail infrastructure, public transit vehicles and so on.  If manufacturing overall will decrease, what will we stop making?

It’s an important question, and there’s at least one obvious target.  The dying dinosaur auto giants manufacturing a dangerous and increasingly unwanted product do not look like good targets for industrial investment to me.  We need to support auto workers.  That doesn’t mean we need to support the internal-combustion auto industry.  Our manufacturing investments, particularly in a time when manufacturing overall is expected to shrink, need to be focused on products with a future.