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Faced with “major disruptions in international trade and in our relationship with the U.S. market,” Québec must develop new markets and accelerate its industrial sectors, says Québec’s Chief Innovator, Luc Sirois. One strategy involves increasing metal processing capacity and expanding machine manufacturing.
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The machine manufacturing sector is a pillar of Québec’s economy — often overlooked, yet endowed with exceptional research and innovation potential. It includes approximately 1,000 companies and employs 40,000 people, representing a 13% increase over the past decade.
“We are talking about an industry whose GDP has grown by 30.5% in ten years.”
Although it represents about 1% of Québec’s GDP, the sector’s economic output has risen from $3.2 billion to $4.2 billion, according to business strategist and President of LJD GROUP, Louis Duhamel. Its growth rate (30.5%) surpasses that of the broader manufacturing sector. The industry is highly diversified, spanning agriculture, construction, mining, forestry, and HVAC systems, while also standing out environmentally: greenhouse gas (GHG) emission intensity has dropped by 17%, placing the sector well below Québec and Canadian industrial averages.
The innovation–productivity paradox
The sector presents a striking paradox: companies invest seven times more than the Québec industrial average in research and development (R&D).
Beyond integrating new technologies to optimize production processes and address skilled labour shortages, “on the ground, companies tell us that R&D is primarily used to improve existing products, often to meet specific customer requests. Many firms do not produce standardized products but instead create custom solutions, meaning R&D focuses on improving equipment rather than scaling production,” explains Nancy Allaire, Director of the Créneau Conception et fabrication machines, which represents the specialized industrial and commercial machine design industry, including equipment such as welding robots.
“Half of companies have ten employees or fewer — and that is a major obstacle.”
Despite strong investment, labour productivity still lags behind Canadian and Ontario averages. This situation stems largely from a business model centered on customized production and small batches, making automation more complex than in mass manufacturing. R&D efforts are often reactive, aimed at solving client-specific challenges or compensating for labour shortages rather than improving overall operational efficiency.
Major Challenges: Workforce and Trade
“Half of companies have ten employees or fewer, which creates structural challenges. To overcome them, firms are increasingly turning to new technologies — especially artificial intelligence — which can significantly improve SME productivity. AI can, for example, generate assembly instructions directly from technical drawings and specifications,” says Richard Blanchet, CEO of Sous-Traitance Industrielle Québec (STIQ), referencing demonstrations showcased at the Hannover Messe trade fair.
“The labour shortage, which affects Québec broadly, is particularly concerning in manufacturing,” notes Luc Sirois. “The job vacancy rate reaches 6.1%, exceeding the manufacturing average,” adds Louis Duhamel. This scarcity slows industry momentum, especially for specialized roles in prototyping and systems integration.
Although companies are strong exporters, Québec still imports more machinery than it exports — often due to preference for established foreign brands or the need to source specialized components abroad.
To compensate for internal skills shortages, “companies need partners: college technology transfer centres (CCTTs), industrial expertise centres (RCEIs), or other businesses. Collaboration is essential because leaders cannot master everything themselves,” Blanchet explains.
“Challenges such as the impacts of tariffs imposed by the Trump administration can act as innovation drivers for Québec companies.”
For Julie White, President and CEO of Manufacturiers & Exportateurs du Québec, delays in technological transition are often less about willingness or financial capacity than about skills and confidence:
“Our manufacturing companies generally have full order books and are performing well. But entrepreneurs struggling daily to fulfill contracts — particularly because of workforce shortages — do not naturally turn toward R&D and innovation.”
According to her, this hesitation reflects a need for knowledge, support, and guidance. She adds that “difficulties such as tariff impacts can ultimately encourage innovation among Québec manufacturers.”
Nancy Allaire notes that “industry morale remains very strong. If companies continue exporting to the United States, it is because their unique expertise is in demand.”
“Industry 4.0 is not just about installing robots. Automation means much more than that.”
“In 2016, I realized labour shortages would intensify. The question became: how can we become better while keeping the same workforce? That’s when the concept of a digital audit emerged,” explains Érick Villeneuve, President of APF Villeneuve.
Industry 4.0 primarily relies on intelligent process automation built on data collection and analysis, interconnected systems, optimized workflows, and real-time decision-making capabilities. Robots are merely execution tools within a broader ecosystem that includes software, AI, logistics, predictive maintenance, and human–machine collaboration.
Without a global strategy, data governance, and workforce adaptation, robotization alone merely modernizes existing inefficiencies. Industry 4.0 is therefore defined by agility, resilience, and system intelligence — far more than by automated machinery itself.
Quoi en retenir ?
Key Takeaways
Technological Adoption
Artificial intelligence and Industry 4.0 create opportunities to automate even small-batch production through automated programming, computer-assisted design, and 3D scanning technologies.
Collaboration and Resource Sharing
For smaller firms, collaboration is essential. Initiatives such as shared HR resources or joint training programs through industrial clusters help overcome internal expertise gaps.
Buy Local and Industrial Strategy
Experts advocate for public procurement policies that prioritize local companies to build a strong technological showcase before expanding exports. Developing a genuine five-to-ten-year industrial strategy is also recommended.
Despite productivity and workforce challenges, industry morale remains strong thanks to full order books and highly specialized expertise that supports international resilience. A new innovation task force will also be created to monitor and advance initiatives within the sector.
To consult the conclusions and highlights of the full study conducted by the Conseil de l’innovation du Québec: link
