Is Productivity Just a Buzzword?

Improving productivity is a crucial challenge for Quebec’s leading manufacturing companies.

The manufacturing sector is one of the key drivers of Quebec’s economy, employing nearly half a million workers and contributing close to 13% of the province’s GDP. However, maintaining competitiveness—especially against regions like Ontario and international markets—requires addressing an increasingly urgent productivity gap. Boosting productivity isn’t just a corporate goal; it’s a recipe for success that leads to higher profit margins, stronger financial stability, and ultimately, greater economic prosperity.

Productivity is measured by the value created per hour worked—it’s a reflection of how efficiently workers convert their efforts into production, often with the help of technology. Compared to other advanced economies, Quebec lags behind. Although productivity levels in the province have improved since the pandemic, Quebec’s manufacturers still require 5.2% more working hours to generate $1,000 in GDP compared to Ontario and 100% more than manufacturers in the U.S.

According to Manufacturiers et Exportateurs du Québec, the province’s manufacturing sector is about 20% less productive than its Ontario counterpart. This persistent gap is concerning, especially given the sector’s many strengths and strategic importance.

One major obstacle is the slower adoption of new technologies, particularly among small and medium-sized enterprises (SMEs). Quebec’s industrial landscape is predominantly made up of small businesses, which often face multiple challenges: a shortage of specialized resources, limited awareness of available technological solutions, a sense of protection due to currency exchange rates, and simply a lack of time to step away from day-to-day operations to focus on transformation.

Underinvestment in technology adoption is another key issue. This is reflected in capital expenditures on advanced machinery and equipment. In 2024, Quebec’s manufacturing firms are expected to invest around $6 billion, only half of Ontario’s projected spending. However, since 2020, Quebec manufacturers have increased their investments by an average of 16.3% per year—comparable to Ontario’s 16.8% and above the national average of 14.9%.

Despite these challenges, many Quebec companies are thriving by embracing modernization. Those equipped with smart, automated, and digitally connected factories demonstrate the sector’s immense potential. With technical support and strategic guidance, these businesses have transformed their operations into agile, sustainable, and highly efficient systems. They understand that automation, integration, and intelligent optimization are essential components of a competitive future.

There are clear pathways to improving productivity in Quebec’s manufacturing sector. Government initiatives, partnerships with industry specialists, and collaborations with research centers are all working toward the same goal: helping businesses enhance efficiency and competitiveness. This includes optimizing production processes, strengthening supply chains, and supporting the technological transition that is critical for long-term success.

If Quebec manufacturers successfully rise to the productivity challenge, they stand to gain tremendous opportunities. Large consumer markets such as the United States and Europe remain within reach, and recent trends in reshoring and reindustrialization—particularly the shift of manufacturing operations from Asia—present exciting new prospects.

There is still work to be done, but Quebec’s manufacturing sector has all the necessary strengths to reclaim world-class productivity levels. With the right strategies and partnerships, businesses can not only secure their future but also contribute to the broader economic growth of the province.