Innovation, Science and Economic Development Minister Navdeep Bains says he wants to make innovation a core Canadian value because it’s “the path to growth, the path that leads to a stronger middle class and higher quality jobs.”
Canada’s agricultural equipment manufacturers have known this for years. In fact, innovation is at the heart of Canadian agriculture, shaping agricultural practices and creating opportunities since European settlement in the late 1800s.
The agricultural equipment manufacturing industry has developed as an entity separate from commercial or industrial manufacturing. Central to this evolution was the need to develop agricultural machinery capable of meeting the challenges of the Canadian climate.
This drive for innovation was critical to farmers who struggled with foreign equipment designed for smaller farms and less arid conditions. These same challenges have enabled Canadian agriculture equipment manufacturers to be global leaders in the development and production of high quality, durable and innovative machinery.
In 2015, agriculture equipment manufacturers exported $1.8 billion worth of products to 154 countries; the U.S. represented 82 percent of this. Innovation drives the industry to develop some of the best agriculture equipment in the world.
But we can’t rest on our laurels. Agricultural Manufacturers of Canada members help drive the economy and are global leaders in innovation. It’s why changes to the Industrial Research Assistance Program (IRAP) and the Scientific Research and Experimental Development (SR&ED) programs are integral to our future.
Innovation is crucial if we want to increase food production by 60 percent to feed more than two billion extra people on the planet by 2050.
The agriculture industry will need to produce more with less and Canadian farmers are at the forefront of meeting this challenge.
Small and medium-sized enterprises benefit greatly from the IRAP program. Often, it is the difference between launching an innovation, leaving it on the research floor or launching without due testing. However, IRAP should be expanded to cover production and marketing costs of projects to help grow the industry and contribute to an innovative economy.
When it comes to the SR&ED tax credit, administrative costs associated with it are increasingly burdensome, resulting in research and development becoming more challenging. The process to make a submission to the program needs to be streamlined if the objectives of the program remain to reward innovation.
Often, those applying for the SR&ED credit will pay anywhere from $30,000 to $100,000 to get the application done. If one assumes 10 applicants hire external consultants for their submission, the combined amount could be upwards of $1 million going into administration costs rather than innovation itself. These are dollars AMC members would rather see invested into R&D.
International trade and opening of new markets is critical. Bains recently said in a speech that “as a country made up primarily of small businesses, (he’d) like to see more than 10 percent of them exporting, and to places other than the U.S.”
Our members agree. Ratifying the Trans-Pacific Partnership and making investments to promote trade and bring international buyers to Canada are essential.
The agricultural manufacturing industry is unique not only in that it’s developed in Canada, but because it affects food sources globally. Our products help feed the world. Our environmental footprint is better today than 30 years ago because of the equipment we have developed and are using.
AMC members lead the world on intellectual property of agricultural equipment. Innovation happens every day because our members are talking to farmers and responding to their needs by refining and enhancing their products.
Innovation is what drives the industry to develop some of the best agricultural equipment in the world. As one of our members says so eloquently, “We’re not putting a man on the moon, but we are helping put breakfast on the table.”
The government must act now to ensure that the Canadian agricultural equipment manufacturing industry remains innovative and strong.
Leah Olson is president of the Agricultural Manufacturers of Canada.