Good morning. It's my pleasure to be here on behalf of Canada's 90,000 manufacturers and exporters and our association's 2,500 direct members to discuss the impacts of the U.S. Inflation Reduction Act on Canadian manufacturing.

The manufacturing industry directly generates 10% of Canada's GDP, produces nearly two-thirds of Canada's value-added exports and employs 1.7 million people in high-paying jobs across the country. Canada's manufacturing industry is highly integrated with that of the United States, and so much so that we really do not trade with each other; rather, we make stuff together. This is why it is vitally important that we maintain a level playing field between Canada and the U.S. when it comes to business incentives. If we do not strike that balance, investment will simply flow south of the border.

I'm joined on the panel today by my colleagues from many of Canada's key manufacturing industrial sectors and from organized labour. We are all united in our concern with the Inflation Reduction Act. We are concerned that this bill, in addition to other American initiatives that were recently announced, has radically increased the amount of money the U.S. government is pouring into their manufacturing companies. We're concerned that this could trigger a flight of capital investment out of Canada and into the U.S. We're also concerned that this could result in fewer manufacturing jobs here in Canada.

If we allow this to occur, we will undoubtedly see a decrease in Canadian manufacturing input. Seeing as two-thirds of Canada's global exports are manufactured goods, the economic losses would be felt dearly on the trade front.

Here's how we stop this from happening.

Number one, the government must eliminate the gaps between new U.S. incentive programs and their Canadian equivalents. We can get into details on these in the Q and A, but there are several key areas in the Inflation Reduction Act that must force a Canadian response. These are the extension of advanced manufacturing tax credits, in section 48C;the enhancement of the carbon capture, utilization and storage tax credits; new clean energy incentives for emission reductions; and, finally, modified U.S. domestic content provisions.

We know that the federal government is crafting the Canadian response. That's good, and CME strongly supports this work. Ideally, the fall economic statement on Thursday will take the opportunity to announce our government's matching programs. At a bare minimum, we urge the government to signal to industry that a fix is on the way.

Number two, the government must redouble their diplomatic efforts with the U.S. to tamp down buy American threats and promote buy North American approaches. Building on our industry's recent successful collaboration with the Canadian government to fight the Build Back Better Act, we need to adopt our team Canada approach once again.

Number three, the government should extend and expand the reach of the accelerated investment incentive—also known as the ACCA—in the fall economic statement. This investment vehicle has been used by manufacturers to make critical investments into their businesses. We were not able to take advantage of the entire five-year span of the program because of the pandemic. Extending and expanding the scope will give industry a much-needed leg up on their U.S. competitors.

Last, we must grow Canadian manufacturing to grow Canadian exports. As CME has said here before, our lacklustre export performance is tied to the fact that Canada's manufacturers are at capacity. We must get the government to partner with industry to tackle our biggest challenges. If we can reduce our labour shortages through more immigration, alleviate supply chain disruptions by investing in critical trade infrastructure and incent our manufacturers to invest in their net-zero transition and in productive automation, then we will grow our manufacturing industry and, by extension, our exports.

In conclusion, manufacturers are very concerned with the negative impacts of the Inflation Reduction Act's incentives. Unless Canada matches them, our sector's ability to compete with the U.S. on an even footing will be weakened. We must quickly introduce a suite of incentives that will narrow this gap. This will be seen as a sound investment in our industrial competitiveness, which will set us up for economic success for years to come.

Thank you. I look forward to the questions.