Direct employment by manufacturers of agriculture, construction and mining equipment in Canada declined 1.9 per cent in 2025 due to trade uncertainties, weak growth in housing development and limited demand for farm equipment, according to a new report.
“This is an industry that has held up well, but one that is still navigating a volatile operating environment,” Megan Tanel, president of the Association of Equipment Manufacturers (AEM), said on Monday after her organization released a report on the economic role played by its members.
Tanel added that the push for critical minerals development and investment in infrastructure in Canada helped offset some of the weaker areas.
Although direct employment also fell in 2024 by 0.7 per cent, the report said employment grew 5.9 per cent in 2023 and remains 3.3 per cent higher than it was in 2022.
In 2025, the off-highway equipment manufacturing industry supported 147,000 jobs here and contributed $24 billion in “value added” to gross domestic product, nearly one per cent of the country’s total nominal gross domestic product (GDP).
Tanel said the outcome of the Canada-United States-Mexico Agreement (CUSMA) review, scheduled for this summer, will be crucial for her members, which includes companies in Mexico and the U.S.
“In general, the high tariffs and the changing tariffs are not helping anyone,” she said.
Still, she said the impacts have been somewhat muted for her Canadian members compared to other countries.
Canadian construction machinery exports to the U.S. fell 2.2 per cent year over year, which was less than the 35.3 per cent decline the United Kingdom experienced and the 28.6 per cent Germany had.
The AEM attributed Canada’s relatively lower export decline to the integration of supply chains in North America. More than 85 per cent of Canadian equipment exports comply with the terms of CUSMA, which protects them from tariffs, according to the AEM.
“CUSMA is working as a stabilizer for Canada, but stability cannot be taken for granted,” Tanel said.
The federal government has been working to help offset some of the impacts of U.S. tariffs, including a $1-billion program announced on Monday that will be administered by the Business Development Bank of Canada and provide financing “at favourable terms” to help companies that have been affected by tariffs.
It also added $500 million to an existing program to help smaller manufacturing firms diversify their products and technology.
Last week, Statistics Canada said GDP grew 0.2 per cent in February, led by a manufacturing sector that expanded 1.8 per cent.
• Email: gfriedman@postmedia.com