John Irwin, Automotive News Canada
October 07, 2019
A tight race between the Liberals and Conservatives in the Oct. 21 general election leaves auto-related policy in limbo, just as the industry grapples with production cuts and falling new-vehicle sales.
While industry executives say they’re confident party leaders understand the sector’s importance to Canada’s economy, the union representing autoworkers warns time is running out to stem the loss of production and jobs to lower-cost jurisdictions such as Mexico.
“It won’t end,” said John D’Agnolo, president of Unifor Local 200, which represents 270 members at a Windsor, Ont., Nemak parts plant, set to close in mid-2020. “The red carpet going south will continue.
“Our governments need to step up to the plate, but they’ve been silent. They have to put provisions in place to stop this [job loss] from happening.”
Industry groups, however, expressed confidence that Canadian politicians will back the industry’s interests regardless of who wins the election.
“I think the two main parties get it when it comes to the automotive sector,” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association. “I’m not terribly worried with one party over the other.”
Mark Nantais, head of the Canadian Vehicle Manufacturers’ Association, said carmakers have forged constructive working relationships with government, regardless of political stripe.
“Whoever wins the election … we look forward to working with the government,” he said. “In Canada, the current government and the government prior to that, everyone is interested in making Canada the best investment environment that we can.”
The industry’s priorities will remain the same, regardless of which party is in government, he added.
“We’ll continue to work with governments on things like investment supports, reducing regulatory burden and ensuring we have regulatory cooperation between Canada, the United States and Mexico.”
Canada’s three major parties will each offer a distinct vision of where to take the country, and their plans for the auto industry will likely be no different.
If Prime Minister Justin Trudeau’s Liberals win, expect to see more of what the federal government has pursued in recent years, including incentives for electric vehicles and using grants to attract investment.
Conservative Leader Andrew Scheer has pledged to scrap the carbon tax, appears non-committal to EV incentives, and has touted tax cuts and deregulation as a way to attract investment. Jagmeet Singh’s New Democratic Party wants to expand EV incentives and has called on the government to boost spending for auto investment.
A New Democrat government would convene an auto summit with provincial, municipal, and industry and labour leaders to develop a consensus on a National Automotive Strategy.
The party would also create a $300-million automotive innovation strategy and increase the incentive to buy zero-emission cars to $15,000, up from the current $5,000.
Current polls as indicate the race between the Liberals and Conservatives is nearly too close to call. As of Oct. 5, a CBC News average of polls showed the Liberals and Conservatives virtually tied with the Liberals at 34 per cent and the Conservatives at 33.6 per cent support, with the NDP at 14.2 per cent.
PRODUCTION CUTS RUN DEEP
Auto manufacturing could play a role in October’s election, as news of closures, shift cuts and investment news has generated headlines in recent months. General Motors, for instance, plans on ending vehicle assembly at its Oshawa, Ont., plant at the end of the year, putting more than 2,000 workers out of a job, though the company will retain at least 300 employees for a stamping operation there. Fiat Chrysler also plans to cut a shift at its Windsor, Ont., assembly plant.
Toyota, however, was the recipient of $110 million in funding from the federal government in 2018 for a $1.4 billion overhaul of its Woodstock, Ont., and Cambridge, Ont., factories. Honda, which announced in 2017 a $492-million upgrade to its Alliston, Ont., plants, received $41.8 million in federal funding.
OPPOSITION MOSTLY COMPLAINS
It appears likely that the Liberal government would continue to offer grants and other incentives as a way to attract investment into the country, along with pursuing trade deals that give manufacturers access to new markets. A spokeswoman for Navdeep Bains, the federal minister of innovation, science and economic development, referred to his previous comments.
“We think we have a diverse economy that has the ability to … design [vehicles], build them, commercialize them. That’s what our strategy is all about,” Bains told Automotive News Canada earlier this year.
If the Conservatives prevail, they appear likely to pursue tax cuts and deregulation in a bid to win new business for Canada.
“It is so important for our country to have a competitive business environment so that the industry can employ people, so that it can innovate and so it can attract investment for the long term,” said Dan Albas, Tory critic for innovation, science and economic development.
The New Democrats have long called for a national auto strategy, arguing that it is needed to reverse the loss of auto jobs and investment.
Brian Masse, MP for Windsor, Ont., and NDP critic on autos and economic development, said that while Canada has attracted about $6 billion in investment since the Liberals took power in 2015, Michigan has drawn about $13 billion from the Detroit Three, alone.
“The age of innovation in auto is here and [the Liberals are] nowhere in the game. We need an auto strategy now,” Masse said during a recent debate in the House of Commons.
Unifor’s D’Agnolo said any government incentives granted to the industry should come with job guarantees.
“There’s been incentives by governments and there are no conditions on those incentives. There has to be provisions on the percentages of parts being built here and on the number of vehicles being built here.”