Targeted investments needed to future-proof Canada’s 
automotive sector: Report

February 26, 2019

OTTAWA—A new report out today from the Canadian Centre for Policy Alternatives finds that maintaining the competitiveness of Canada’s important automotive sector in a rapidly changing industry requires decisive action and collaboration by provincial and federal governments, targeted investment and new policies designed for the new automobility.

 “We do not accept automotive plant closures as a foregone conclusion,” says report co-author Charlotte Yates, Provost and Vice-President Academic at the University of Guelph. “While Canada’s most recent free trade agreements have left our automotive sector more vulnerable to tariff-free foreign competition, the solutions proposed in this report could promote a revitalization of Canada’s the auto industry.” 

The report, by two researchers affiliated with the Automotive Policy Research Centre (APRC), assesses the sector’s current landscape and outlines a multi-pronged policy plan to boost competitiveness and avoid plant closures within the Great Lakes Region. 

Among the report’s recommendations:

  • Develop a green industrial policy with targeted supports for companies that commit to building green vehicles sustainably, to respond to consumer demand for electric and autonomous vehicles. Entry into new markets will be eased only if Canada can position itself as a source of high-quality, green vehicles built for the future;
  • GM’s announcement of the likely plant closure in Oshawa, impacting thousands of workers, is causing a negative ripple effect, with auto parts suppliers that feed into the facility already announcing intention to shutter. Policymakers provincially and federally should join U.S. counterparts in encouraging GM to maintain its manufacturing footprint;
  • To attract investment, governments should do more to promote Canada’s competitive advantage as a source of highly productive, skilled workers producing top-quality products;
  • Establish a workforce development plan that will invest in engineering, technical and data analytic skills, including trades and apprenticeships and income supports for skills retraining towards a just transition for workers;
  • Create and expand incentives—including tax credits and grants, easing access to capital and strategic use of procurement policy—available to small- and medium-sized Canadian companies to support competition globally and increase value for Canadian IP;
  • Focus R&D investments on specific centres of excellence rather than R&D more broadly, building capabilities in areas of proven strength;
  • Canadian and Ontario governments need to foster deep collaboration across multiple levels of government while reducing bureaucratic obstacles and jurisdictional squabbles.

“The good jobs that Canada’s automotive sector provides are the kinds of employment that we should be aiming to promote in Canada,” adds co-author John Holmes, Professor Emeritus at Queen’s University. “It is possible to future-proof the industry in ways that keep it healthy in a competitive the global market.”  

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The Future of The Canadian Auto Industry is available for download on the CCPA website. For more information contact Alyssa O’Dell, CCPA Media and Public Relations: 613-563-1341 x307, [email protected] or cell 343-998-7575.

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