The document provides a summary of manufacturing sales in Canada for March 2017. It includes the following key points: 1) Sales decreased in seven provinces led by Ontario, with declines in the motor vehicle, motor vehicle parts, and petroleum and coal products industries. Quebec saw a 2.1% rise in sales driven by transportation equipment. 2) Alberta saw a 1.4% sales increase for the fourth straight month led by gains in the machinery and fabricated metal industries. 3) The document reviews industry segments, provinces, commodity prices, and headlines from various sources regarding topics like softwood lumber tariffs and NAFTA reforms.

1. CANADA –
MANUFACTURING SALES –
MARCH 2017
BY: PAUL YOUNG CPA, CGA
APRIL 13, 2017

2. AUTHOR / BIO
Septe
mber
9,
2014
• Paul Young, CPA, CGA
•SME – Financial Performance Management (TM1, Cognos Controller and
Cognos Disclosure Management, OpenPages, Algorithmics, Cognos Integrated
Server, Cognos Command Center and Datawatch)
•Industry Experience
•15+ years in Corporate Reporting, Budget & Forecasting, Costing,
Business Process Management, Internal Audit and Controls, Risk
Management, Financial Analysis, Costing
•11+ years in financial solutions (FOPM, FPM, Risk, Office of the Finance,
Risk Management)
•8+ years teaching Advance Finance, Advance Accounting, Public Finance
and Advance Management Information Systems
•Blogger in areas like Finance Analysis, Government policies, market
segment

3. AGENDA
• PMI Index
• Softwood Lumber
• NAFTA
• Hydro Rates/Ontario
• Commodity Index
• Sales by Segment
• Sales by Province

4. HEADLINES
Globe and Mail – April 13, 2017
Reuters – April 13, 2017

5. PMI - INDEX
Economic Calendar.com – April 3, 2017
• There was a small decline in order backlogs
with companies citing productivity
improvements and greater staff hiring. In
this context, the rate of employment growth
was the fastest in five years.
• Delivery times continued to lengthen for the
month due to greater demand and low
stocks among suppliers.
• The rate of increase in input costs was the
strongest since May 2014 and output prices
also increased at a faster pace for the
month. The lengthening delivery times will
also tend to put further upward pressure on
prices.
• The Bank of Canada has maintained a
generally cautious outlook surrounding the
economy and continued to insist that there
is significant spare capacity in the economy.

6. SOFTWOOD LUMBER
“My experience has been that the Obama administration was not particularly interested in
getting a softwood deal,” Clark told reporters after delivering her keynote address.
“I mean, they talked a nice talk and they put out nice press releases, but in all that time there
wasn’t any real progress to getting a deal.”
The softwood lumber trade dispute has been a thorn in the side of federal and provincial
governments for decades. The issue flared up again in late 2015 after the expiry of a nine-
year agreement that had quelled the discord.
American lumber producers are pushing for their government to restrict trade on Canadian
imports that they claim are unfairly subsidized.
Premier for BC – Christy Clark – Plant.ca – April 11, 2017

7. Trump’s NAFTA proposal looks a lot more like reform than
revolution
For instance, there’s discussion of the need to update NAFTA in order to develop rules regarding e-
commerce, digital sales, and data housing requirements — basically ensuring that there are new
regulations specific to the information economy, which has blossomed since the accord was first
negotiated decades ago. Canada and Mexico are on board with having those discussions.
There are also proposals to make labor and environmental regulations stricter, which would mainly
affect on Mexico. The idea is that by demanding more stringent standards and enforcement of
standards regarding issues like minimum wages, union organizing rights, workplace safety, and
environmental impact, the cost of doing business in Mexico will go up, blunting some of the edge
that lower-paid Mexican workers have over more expensive US workers.
VOX.Com – April 11, 2017
Proposed amendments

8. Trump’s NAFTA proposal looks a lot more like reform than
revolution
• The biggest one is probably the call for allowing a country to use tariffs as a safeguard if a set of
imports causes “serious injury or threat of serious injury” to a domestic industry (these are
known as “snapback tariffs”). Under NAFTA, the norm is zero tariffs on goods crossing borders;
this would create temporary exceptions to preserve industries particularly hard hit by
competition. It would allow the US to say that, for example, a certain Mexican auto part
deserves to be taxed at the border because it is killing the US industry that makes comparable
auto parts.
• Government procurement could be another big issue. Under NAFTA, when the US government is
overseeing domestic projects like infrastructure, it’s required to consider Canadian and Mexican
companies alongside US bidders. But the proposal’s language suggests the administration could
push for rules that allow US companies to have a competitive advantage over NAFTA partners’
companies. That’s probably not going to go down so well during talks.
VOX.Com – April 11, 2017
Contentious issues

9. Ontario manufacturers say hydro plan
doesn’t help them
The Industrial Conservation Initiative program for large manufacturers and businesses
was also expanded so that more industrial customers will qualify.
However, there are thousands of Ontario businesses that are too big for one program
and too small for the other, and the government estimates they will only see about two
to four per cent off their bills.
Jocelyn Bamford, with the Coalition of Concerned Manufacturers – Global TV – April 11, 2017

10. COMMODITY INDEX
Scotiabank – April 12, 2017

11. SALES BY SEGMENT
Stats Canada – April 13, 2017
• Sales in the motor vehicle assembly industry were
down 5.3% to $5.7 billion in February, following two
months of gains. The decline in February was mostly
attributable to fewer vehicles produced. After
removing the effect of price changes, sales in volume
terms decreased 4.6% in February.
• Following four consecutive monthly gains, sales in
the petroleum and coal products industry fell 5.0% to
$5.1 billion in February, reflecting lower prices and
volumes. After removing price effects, sales volumes
of petroleum and coal products were down 2.0%.
• These declines in current dollars were partially offset
by increases in the aerospace product and parts
(+27.0%), primary metal (+2.8%) and machinery
(+3.1%) manufacturing industries. Once the effects of
price changes are taken into consideration, sales
volumes increased by 30.7%, 2.0% and 3.2%
respectively in these three industries

12. RBC – ECONOMICS

13. NATIONAL BANK OF CANADA
National Bank of Canada – April 14, 2017

14. SALES BY PROVINCE
Stats Canada – April 13, 2017
• Sales decreased in seven provinces in February, led by
Ontario.
• Sales in Ontario fell 1.1% to $25.7 billion, mostly
attributable to lower sales in the motor vehicle (-5.5%),
motor vehicle parts (-3.4%) and petroleum and coal
product (-6.1%) industries. These decreases were
partially offset by a 5.4% increase in sales in the primary
metal manufacturing industry.
• In Quebec, sales rose 2.1% to $12.9 billion in February,
their highest level since July 2008. The increase was
mainly attributable to a 27.4% gain in the transportation
equipment industry. Sales also rose in the food (+0.9%)
and machinery (+2.1%) industries. These increases were
partly offset by declines in the petroleum and coal
products and the chemical product industries.
• In Alberta, sales rose 1.4% to $5.7 billion, the fourth
straight monthly increase. The overall gain was largely
driven by higher sales in the machinery (+13.6%) and
fabricated metal product (+11.1%) industries.

15. STEEL INDUSTRY
Source – World Steel Institute

16. QUESTIONS/ANSWERS
CONTACT: PAUL_YOUNG_CGA@HOTMAIL.COM