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Will Ontario’s 3rd economic development minister in a year be a charm for auto?

Grace Macaluso, Automotive News Canada
August 07, 2019

A revolving door appears to have been installed at the Ontario Ministry of Economic Development, Job Creation and Trade.

Vic Fedeli became the third minister in about a year to take over the cabinet portfolio that is of critical importance to the auto industry.

The former treasurer landed in the post held by Todd Smith, not out of choice but necessity for Conservative Premier Doug Ford, who saw a cabinet shuffle in June as a remedy for jeering crowds and plunging opinion polls.

Saddled with an unpopular provincial budget, Ford shifted Fedeli to economic development from finance, a move deemed by political pundits as a demotion.

While cabinet shuffles are a fact of political life, the high turnover rate in such a pivotal job is worrisome for a sector trying to remain viable as its manufacturing footprint continues to shrink.

The good news, say auto industry executives, who prefer to look on the bright side, is that Fedeli gained macroeconomic insight into the sector’s challenges from his previous role.

“His perspective of having just been treasurer probably is the most acceptable replacement if you’re going to lose your minister,” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association. “We need someone who’s got big picture understanding of the cost structure in Ontario. The former finance minister probably has a better perspective than anybody else.”

Smith, in the job for only eight months, was yanked just as he seemed to be hitting his stride, consulting with industry and subsequently announcing a plan to boost auto investment along with measures aimed at reducing red tape and other costs blunting the sector’s competitive edge.

But it will fall to Fedeli to address one of the industry’s biggest complaints: soaring electricity rates.

“We made it very, very clear at least over the last five years that electricity rates have to come down, particularly for our industry, which can’t access some of the programs” aimed at mitigating costs for industrial users, said Mark Nantais, president of the Canadian Vehicle Manufacturers Association, which represents the Detroit Three. “To that extent, they’ve heard us, and we anticipate having more discussions. And I will say, without being too presumptuous, we’re hopeful they’ll come back to us with some proposals.”

Global Automakers of Canada President David Adams noted that economic development “has always been an important portfolio for securing foreign direct investment, particularly in the 1980s when we secured the Honda and Toyota plants.”

While he thinks the current government “recognizes the importance of the auto industry, consistency is always better than sort of a revolving door.”

As General Motors proceeds with plans to end vehicle assembly at its Oshawa, Ont., plant this year, let’s hope Fedeli lives up to industry expectations and sticks around at least until the next election.

 

 

Via: Automotive News Canada