Canadian Occupational Projection System (COPS)

(NAICS 3251-3259)

This industry comprises establishments primarily engaged in manufacturing chemical products from organic and inorganic raw materials (such as petrochemicals and industrial gas, fertilizers and pesticides, pharmaceutical and medicine products, paint, ink, soap and cleaning products). Pharmaceutical and medicine products and basic chemicals are the largest two segments of the industry, accounting respectively for 32% and 25% of the production in 2023. Overall, the industry is highly export intensive as more than 75% of its production is shipped to foreign markets, essentially to the United States, which accounts for 76% of exports. Pharmaceutical and medicine products have the highest export intensity, with close to 100% of production delivered abroad. In contrast, pesticides and fertilizers have the lowest export intensity, with 75% of production sold on the domestic market. The industry employed about 114,700 workers in 2023 (6.3% of total manufacturing employment), with 48% in pharmaceutical and medicine products, 15% in basic chemicals and 14% in soap, cleaning compound and toilet preparation products. Employment is mostly concentrated in Ontario (49%) and Quebec (27%), and the workforce is largely composed of men (60%).

Key occupations (5-digit NOC) include:

• Chemical plant machine operators (94110)
• Chemical technologists and technicians (22100)
• Labourers in chemical products processing and utilities (95102)
• Supervisors, petroleum, gas and chemical processing and utilities (92011)
• Chemical engineers (21320)
• Central control and process operators, petroleum, gas and chemical processing (93101)
• Chemists (21101)

Projections over the 2024-2033 period

Real GDP is projected to increase at an average annual rate of 1.3%. The industry is expected to continue benefiting from the rapid pace of population growth as well as population aging. An increased need for medication due to aging will support the ongoing demand for the pharmaceutical and medicine manufacturing industry. In addition, other sub-sectors of the industry will be supported by the growth in the construction sector, as it provides a number of materials, as well as by the demand for fertilizers and other agricultural chemicals, domestically and from emerging markets. Petrochemicals output will also gain from several new investments related to carbon capture and decarbonization.

Productivity is expected to grow at an average annual rate of 0.4%. Productivity has been relatively flat since the beginning of the decade and limited growth is expected over the projection period, especially during the first half as new investment has been limited. All the projected gains in productivity are expected to happen in the second half of the projection period as new investment will be necessary for the industry to put in place the infrastructure that will allow the industry to decarbonise and lower emissions, in order to meet the Government emission targets.

Employment is projected to rise by 0.9% annually. With limited expected gains in productivity, employment is projected to rise, especially in the first half of the projection period. With almost half of employment concentrated in the pharmaceutical and medicine products, this sub-sector will continue to support employment growth as the outlook remain positive due to continued population aging.

Challenges and Opportunities

One of the main challenges facing the industry will be the need to reduce greenhouse gas emissions in Canada. While some of the sub-sectors are more emission intensive than others, such as the production of industrial chemicals and petrochemicals, the chemical manufacturing industry will need to adapt its production process to be less emissions intensive. Moreover, the United States’ threat to impose new tariffs on imports from Canada (which was not incorporated into the projections) constitutes a major source of uncertainty, particularly for an industry highly focused on exports, and if it materializes, it will impose a severe burden on the industry.

Real GDP, Employment and Productivity Growth rate (2024-2033)

Sources: ESDC 2024 COPS projections.