Page 11 - CFCM Nov-Dec-2020 Final_Neat

CPCA CORNER

Current Paint and Coatings

Issues in Canada

BY GARY LEROUX

CAnADIAn COATInGS MARkET uPDATE – Overall, it has been a difficult year for many in the coat-
FALL 2020 ings sector, especially those companies supplying the non-
Shortly after the start of the economic lockdowns in April architectural and industrial coatings markets. Industry lead-
a CPCA Affiliate Member, Orr & Boss, provided CPCA with ers are hopeful that the worst is behind them as the initial
a forecast on the Canadian coatings market for 2020 and shock of the recession and its associated operational
its recovery into 2021. Given the economic volatility caused changes have faded. Also, there continue to be growing
by the pandemic, Orr & Boss recently updated the outlook. opportunities in various coatings markets such as antimi-
In general, the new forecast is slightly more optimistic crobial and anti-viral coatings. Assuming further lockdowns
for the Canadian paint and coatings market than at the do not significantly affect manufacturing recovery, the sector
outset of the pandemic, driven by the strong architectural as a whole should continue trending upward into Q4 of
DIY sector. Residential construction activity returned to 2020 and materialize into some growth, however modest,
pre-COVID levels igniting new contract painter business in 2021.
and as homeowners began to allow contractors in their
homes, further increasing paint sales. As a result, paint CAnADIAn EnvIROnMEnTAL PROTECTIOn ACT
manufacturing activity is recovering faster than expected. CPCA contributed to the Industry Coordinating Group’s
Overall, total volume and value is expected to be (ICG) formal submission to the federal government on in-
down about 3 percent for the year, before rebounding dustry’s real concerns with the prospect of CEPA reform
next year to the tune of 3.5 percent for volume and 6.1 and the continued functioning of chemical assessment un-
percent for value. However, the market is quite volatile der the CMP during the COVID-19 pandemic. ICG is com-
and these numbers obscure some of the realities experi- prised of more than 20 associations representing companies
enced by specific sectors. The largest segment, architec- in the chemical industry. In July 2020, the federal govern-
tural coatings, had a good year, up 4.3 percent in volume ment assured ICG that work on CEPA reform and renewal
and 7.1 percent in value. With homeowners staying of the Chemicals Management Plan (CMP) was continuing.
home and spending less time traveling, eating in restau- There have been a number of legislative timelines
rants, or at other entertainment options, many have pushed back in Canada and throughout the world due to
focused on upgrading their homes. the pandemic. Hence, government reached out to industry
Other non-architectural industrial coatings segments have to determine if any of these changes affected industry’s
not been as strong. The auto-OEM market is down signifi- views on possible CEPA reform or CMP renewal. CPCA
cantly as it is closely tied to the number of new automotive supports the wider chemical industry position that the
builds in Canada, which are down 43 percent through June flexibility of CEPA allows more effective chemical assess-
of this year. The auto-refinish market is similarly down, as ment under the current legislation, especially if accompa-
it correlates directly with the number of auto accidents, nied by appropriate policy innovations. The ability to
which have decreased because of reduced traffic and con- evolve and set new targets is already built-in to the chem-
gestion with many working from home. In fact, major ical assessment process in Canada with the focus on risk
Canadian cities have traffic congestion levels 32 percent assessment, which has made the CMP among the best in
below September 2019 values. Other industrial coatings the world for assessment.
segments such as powder coatings are largely driven by Industry urged government to focus on completing the
manufacturing activity. Canadian manufacturing activity is work already committed to under the CMP process and
slowly returning to pre-pandemic levels but as of August it any proposed changes should be consistent with the many
is still below last year’s levels. Orr & Boss forecasts that efforts made to date both for chemical assessment and risk
manufacturing activity will continue its upward trajectory management. Industry encourages the federal government
in the coming months and by year-end will be above last to explore new directions, which can easily be accommo-
year’s level. dated without any changes to the CEPA statute.

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