Reports on the future of Ontario’s auto industry: one by experts, one by the Ontario government

future of auto industryIn The Future of Canada’s Auto Industry , released on February 26, co-authors Charlotte Yates and John Holmes assess  the sector’s current state – focusing on trade agreements and technological innovation –  and recommend a suite of policies to boost competitiveness and avoid plant closures, especially timely in the aftermath of the “shocking” closure announcement of GM Oshawa.  Although concentrated in Ontario, the industry is important nationally: “The automotive industry contributes significantly to Canada’s economic prosperity through investment, employment and technological innovation. Currently, it is Canada’s second largest manufacturing industry, adding $18.28 billion a year to GDP, $86.58 billion a year to Canadian exports (17% of total merchandise exports), and employing over 126,000 people directly and half a million people indirectly.”

The authors acknowledge the importance of the future trend to electric and autonomous vehicles, and propose a green industrial policy with targeted supports for companies that commit to building green vehicles sustainably. They point out current  shortages of skilled workers and the aging workforce in the industry, and call for   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.  They acknowledge the challenges of global competitiveness and the need for research and development, and call for financial incentives, including tax credits and grants, and better access to capital for small- and medium-sized Canadian technology companies, as well as more focused R & D investments. In general, they call for deep collaboration between the federal and Ontario government, rising above bureaucratic and jurisdictional interests.  Flagged as the most important condition for future success for the industry:  “government policy needs to prioritize the North American automotive platform centered on the Great Lakes. Canada–U.S. auto production and trade could be further integrated to create even greater competitive advantages of efficiency associated with a larger regional production footprint. Canada continues to need preferential tariff access to the American market for finished goods for this model to succeed.”

The Future of Canada’s Auto Industry was published by the Canadian Centre for Policy Alternatives.  A summary article which appeared in the Toronto Star on February 26,   “Electric, driverless vehicles key to survival of Canada’s auto industry ” gives short shrift to the trade relationships and the complex global dynamics of the auto industry, which figure more prominently in the actual report.  The authors, John Holmes and Charlotte Yates, are both members of Canada’s Automotive Policy Research Centre (APRC), with long and deep knowledge of Canada’s  auto industry.

autostrategy_2019Ontario government discussion paper recommends less red tape and “pro-jobs labour reforms”: 

In a second report, the same issues are discussed but with much different emphasis and level of analysis.  The Ontario government’s  discussion paper, Driving Prosperity: the Future of Ontario’s Automotive Sector  was released in February under the “Open for Business” mandate.  The government describes the paper as:  “… a 10-year vision for how industry, the research and education sector, and all three levels of government, can work together to strengthen the auto sector’s competitiveness and bring new jobs to the province.”  In the introduction, the government states “We are driving prosperity in the industry and creating a pro-jobs environment by cutting red tape, eliminating the cap-and-trade carbon tax, allowing businesses to write off job-creating capital investments faster, and
embracing pro-jobs labour reforms.”

Although the government report acknowledges technological disruption and trade issues as challenges, there is no direct mention of the GM Oshawa plant closing – and in fact, most of the statistics provided are from 2017.   The issue of retraining and skills upgrading is raised in the general context of changing technologies, stating: “ We also want to minimize the disruption caused to workers and their families by technology and production mandate changes. We need to find new ways to respond to complex challenges. We need to establish new relationships with government partners in labour and academia to help Ontarians find faster and smarter training solutions.”

 

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