For years, the conversation around manufacturing in Ontario often focused on what was leaving.
Production moved to lower-cost jurisdictions. Supply chains stretched across borders and continents. Companies increasingly relied on overseas suppliers for components, materials and finished products.
Cost was the primary consideration.
Then the world changed.
The pandemic exposed the vulnerability of extended global supply chains. Trade tensions made cross-border dependencies more complicated. Tariffs introduced another layer of uncertainty. And governments and manufacturers alike began asking a question that would have seemed much less urgent a decade ago:
What should we be manufacturing here?
That question is helping reshape the outlook for manufacturing in Ontario.
Reshoring: the process of bringing manufacturing or components back to Canada has become a more significant part of the conversation. Ontario’s own economic development programs specifically identify reshoring and strengthening local supply chains as priorities, while recent investments suggest this is becoming more than a policy discussion.
The opportunity for Ontario is significant.
But so is the challenge.
Because bringing manufacturing home isn’t simply about building more factories.
It’s about building a manufacturing ecosystem capable of competing globally.
The Case for Manufacturing in Ontario Is Changing
Ontario isn’t going to become the lowest-cost manufacturing jurisdiction in the world.
That isn’t the competitive advantage we should be chasing.
Instead, Ontario’s opportunity is built around a combination of factors: an established manufacturing base, proximity to the United States, sophisticated engineering and technical capabilities, an extensive supplier network, access to transportation infrastructure and a workforce with deep industrial experience.
The province already has one of the largest manufacturing economies in Canada. Ontario’s 2026 Budget says the manufacturing sector accounts for more than 800,000 workers and identifies domestic supply chains, productivity-enhancing technologies, next-generation production facilities and workforce development as key priorities for the sector.
The question is no longer simply whether Ontario can manufacture.
It is whether Ontario can manufacture competitively, reliably and at the level of productivity required to win global business.
That is a much more interesting challenge.
Reshoring Is Already Happening
There are signs that the shift is more than a theoretical possibility.
In May, Tenaris announced a $306 million investment to modernize and expand its steel pipe manufacturing operations in Sault Ste. Marie. The project is expected to create approximately 200 new jobs and increase annual domestic production of seamless and welded pipe by roughly 80 percent, strengthening Canada’s domestic energy supply chain.
In the Greater Toronto Area, the federal government announced nearly $26 million in support for 31 businesses and organizations in October, with projects focused on strengthening Canadian supply chains, responding to tariff pressures and driving long-term growth. One of the supported companies, APS Metal Industries, is using the investment to modernize manufacturing operations through advanced and energy-efficient production technologies.
There are examples closer to home as well.
In July, FedDev Ontario announced nearly $40.5 million in funding for businesses and organizations in the Waterloo and Brant region, supporting projects focused on expanding capacity, strengthening domestic supply chains and advancing next-generation technologies.
And in Hamilton, recent federal investments have supported manufacturers working to strengthen supply chains, increase productivity and expand capabilities in sectors including automation, steel, packaging and specialized industrial equipment.
These investments don’t mean every manufacturing operation is coming back to Ontario.
They do demonstrate something important:
There is increasing economic value being placed on manufacturing capacity that exists here.
The “Buy Canadian” Conversation Has Changed the Equation
The shift isn’t limited to private-sector investment.
Government procurement is increasingly being viewed as a tool for strengthening domestic industrial capacity.
A recent example is the federal government’s $4.7 billion investment in 313 new VIA Rail passenger cars. For the first time in four decades, the passenger cars will be manufactured and assembled in Canada, with production taking place at Alstom’s facility in Thunder Bay and components sourced through a network of more than 900 Canadian suppliers. The project is expected to support nearly 700 jobs in Ontario and Quebec.
That’s more than a large procurement contract.
It illustrates how a major purchase can create demand throughout an entire manufacturing ecosystem.
A railcar manufacturer needs suppliers.
Suppliers need materials.
Materials require processing.
Production requires engineering, automation, maintenance, quality and logistics.
And all of those operations require people.
The economic impact of manufacturing therefore extends far beyond the factory where the final product is assembled.
Reshoring Doesn’t Mean Bringing Everything Back
There is an important distinction here.
Reshoring isn’t about pretending that Ontario can, or should, manufacture everything domestically.
Global supply chains aren’t disappearing.
For many manufacturers, importing certain components will continue to make economic sense.
The opportunity is to identify where domestic production creates a strategic advantage.
That might be a critical component where supply disruption could shut down an entire operation.
It might be a product with increasing Canadian demand.
It might be a capability that is important to national security or infrastructure.
Or it might be an opportunity to reduce reliance on a single supplier or geography.
Ontario’s Ontario Together Trade Fund explicitly identifies reshoring as a priority, including bringing manufacturing back into an Ontario facility or producing components in Ontario that are currently sourced from outside Canada.
The objective isn’t isolation.
It’s resilience.
The Real Test: Can Ontario Manufacture Competitively?
This is where the conversation needs to become more sophisticated.
It is easy to celebrate a new investment announcement.
It’s harder to build a manufacturing operation that remains competitive five, ten or twenty years later.
Ontario manufacturers face higher costs than many lower-cost jurisdictions. Labour is more expensive. Energy, facilities and regulatory requirements all factor into the equation.
That means companies bringing production to Ontario need to compensate through productivity, technology, quality, reliability and workforce capability.
A domestic supply chain only works if it can compete.
That is why the current investment in advanced manufacturing technology is so important.
Automation, robotics, digital production systems and modern equipment aren’t simply about reducing labour requirements. They can help manufacturers increase throughput, improve consistency, reduce waste and make higher-value production economically viable.
The question becomes:
Can Ontario use technology to offset some of its cost disadvantages while leveraging the expertise it already has?
That is where the opportunity gets particularly interesting.
Manufacturing Investment Creates Another Challenge: Capacity
There is a less visible issue that comes with all of this investment.
Who is going to do the work?
A new manufacturing facility doesn’t become productive simply because the building is complete and the equipment is installed.
Someone has to design the process.
Someone has to install and commission the equipment.
Someone has to program the controls.
Someone has to maintain the machinery.
Someone has to manage quality.
Someone has to run production.
Someone has to manage the supply chain.
And someone has to lead the operation.
The more sophisticated the manufacturing environment becomes, the more specialized those roles become.
This is where Ontario’s existing workforce challenge intersects directly with the reshoring opportunity.
The province can attract billions of dollars in manufacturing investment, but the economic benefit depends on its ability to turn that investment into productive operations.
The Workforce May Be the Limiting Factor
Ontario is already dealing with significant demand for skilled and technical talent.
That makes workforce planning an important part of the reshoring conversation, not an issue to address after the investment has been announced.
Manufacturers expanding in Ontario may need to recruit experienced engineers, skilled tradespeople, maintenance professionals, automation specialists, quality leaders, supply chain professionals and operations executives.
They may also need to develop entirely new capabilities within their existing workforce.
And in many cases, they will be competing for the same people as every other manufacturer expanding in the province.
This is where reshoring creates an interesting paradox.
Bringing manufacturing back creates jobs. But the ability to fill those jobs becomes part of whether the reshoring strategy succeeds.
That means workforce planning needs to happen alongside capital planning.
Not afterward.
Ontario Has More Going for It Than It Sometimes Gets Credit For
It is easy to focus on the challenges facing manufacturing in Ontario.
The costs are real.
Trade uncertainty is real.
The talent shortage is real.
But there are also reasons to be optimistic.
Ontario has an enormous existing manufacturing base.
It has decades of automotive, aerospace, food, steel, machinery and advanced manufacturing expertise.
It has an established network of suppliers.
It has engineering and research institutions.
It has access to one of the world’s largest consumer markets.
And there is significant investment flowing into new technologies and manufacturing capacity.
Recent announcements illustrate the breadth of that investment. Hanon Systems is building Canada’s first electric compressor manufacturing plant in Vaughan, supported by a $10 million federal investment, while Xanadu Quantum Technologies has announced an $893 million project that includes new advanced manufacturing capabilities in Toronto.
These aren’t the manufacturing facilities of twenty years ago.
They are more automated, more technical and more connected to engineering, software and advanced technologies.
That creates an opportunity for Ontario to compete not by trying to recreate the manufacturing economy of the past, but by building the manufacturing economy of the future.
The Next Chapter Won’t Be About Bringing Everything Home
The reshoring conversation can sometimes sound like a simple choice:
Manufacture here instead of somewhere else.
The reality is more complicated.
The future of Ontario manufacturing will likely involve a combination of domestic production, global sourcing, automation, supply-chain diversification and strategic investment.
The manufacturers that succeed will be the ones that understand where local production creates value and then build the capabilities to make that production competitive.
That means investing in technology.
It means strengthening supplier relationships.
It means developing internal talent.
It means building resilient operations.
And it means having access to the people who can make those investments work.
The Opportunity Is Bigger Than the Factory Floor
Perhaps the most encouraging part of Ontario’s current manufacturing story is that the opportunity extends beyond individual companies.
When a manufacturer expands, suppliers benefit.
When a new supplier enters the market, additional technical roles are created.
When production becomes more sophisticated, engineering and automation capabilities grow.
When workers develop those skills, the broader manufacturing ecosystem becomes stronger.
That’s how a manufacturing cluster becomes more competitive.
The goal shouldn’t simply be to bring one factory back.
It should be to create an environment where manufacturing investment continues to make sense.
That is the opportunity Ontario has in front of it.
What Manufacturers Should Be Thinking About Now
For manufacturers already operating in Ontario, this moment presents an opportunity to look beyond the immediate pressures of tariffs and trade uncertainty.
Where could you localize your supply chain?
Which capabilities are too important to leave dependent on a single offshore supplier?
Could new technology make domestic production more competitive?
Where could additional capacity create new opportunities?
And perhaps most importantly:
Do you have the workforce required to take advantage of the opportunity?
Because capital can be invested relatively quickly.
Buildings can be constructed.
Equipment can be purchased.
But building a team with the technical knowledge, manufacturing experience and leadership capability to operate a complex facility takes considerably longer.
The Opportunity Is Here. The Workforce Has to Follow.
Ontario’s manufacturing story isn’t simply one of decline or recovery.
It’s changing.
The province is seeing significant investment in domestic supply chains, advanced manufacturing, energy, transportation, automotive and emerging technologies. Government programs are increasingly focused on reshoring, productivity and supply-chain resilience, while manufacturers themselves are investing in new capacity and modernizing existing operations.
The opportunity is real.
But manufacturing investment doesn’t create value on its own.
Factories run on people.
The engineers who design the processes. The skilled tradespeople who keep equipment running. The automation specialists who make new technology work. The quality professionals who protect the product. The operations leaders who turn investment into performance.
At itec group, that’s the part of the manufacturing story we know best.
We work exclusively within manufacturing and related disciplines, building relationships with specialized talent across engineering, skilled trades, maintenance, automation, operations, supply chain and leadership.
So as Ontario manufacturers consider bringing production home, expanding capacity or investing in the next generation of manufacturing technology, we’re looking beyond the job description.
We’re looking at the people required to make the investment successful.
Ontario has an opportunity to build more of what it needs, strengthen its supply chains and compete on a global stage. The companies that capitalize on that opportunity will need more than capital and technology. They’ll need the right people behind both.
