What’s In Store for Canadian Coatings Manufacturers
October 2017 www.coatingsworld.com Coatings World | 53
worker or consumer safety. The growing level of bureaucracy
takes on a life of its own, requiring companies to clear regulatory hurdles for licensing and permitting processes and a host of
other measures that must be complied with to sustain and grow
their business. More often than not this slows down business,
which in turn slows down job creation, which in turn reduces
the level of both corporate and personal taxation. It is a negative spiral that often serves no one’s interests but the regulatory
body involved.
In recent years we have seen this in spades in Ontario where
public policy, which some would argue has been bad public
policy, has driven up the cost of doing business. These include
increasing hydro costs, new carbon pricing taxes, growing stewardship fees increasing product prices and other environmental
fees related to plant operations and waste handling. All have
served to increase the cost of doing business leading to more
than 300,000 jobs disappearing in the last decade. Is it any wonder the Ontario government has now embarked on a Red Tape
Reduction Challenge for six sectors, including the chemical sector, to help put the out-of-control regulatory genie back in the
bottle? Industry will do what it can to ensure this is not another
consultation exercise for the sake of consultation with no discernible reduction in regulation.
Generally, industry understands the ways in which these is-
sues negatively impact business. These challenges go above and
beyond the norm and prevent many from meeting business tar-
gets. The profit and loss statement is ruthless in that regard.
A case in point relates to the expansion plans of a good-sized Canadian SME with more than 150 employees selling
product in Canada, the United States, Europe and China. The
company experienced the full wrath of the regulatory beast
when considering an investment in new plant and facilities
to support and sustain its growth. The $4 million budgeted
for expansion was immediately shelved as it became clear the
approval process would take up to one year and very likely
longer. The fact that three U.S. states were dangling incentives that were very hard to ignore, such as tax incentives
and “free” land to build new facilities, has only further exacerbated the decision. Of course, it would only be a matter
of months, not years, to be up and running. Time is money
after all.
The founders and current operators of the company want
to remain in Canada, even expanding the business here. But
they must prepare for the reality of a globalized economy and
the competition it brings. Fortunately, the government is now
reconsidering what it might do to help facilitate their expansion plans in light of the unfortunate circumstances created
by these regulations. Let’s hope the story has a happy ending. Otherwise, this and many more companies like it face a
tougher future in Canada. CW
“In Canada, however, the coatings industry continues to be among
the most heavily regulated sectors by all levels of government and
this has not diminished...one could argue it has ramped up with
the Chemical Management Plan...”
