{"id":222259,"date":"2025-10-18T13:08:07","date_gmt":"2025-10-18T13:08:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/222259\/"},"modified":"2025-10-18T13:08:07","modified_gmt":"2025-10-18T13:08:07","slug":"canada-needs-to-start-thinking-about-an-auto-sector-without-u-s-automakers","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/222259\/","title":{"rendered":"Canada needs to start thinking about an auto sector without U.S. automakers"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Ottawa needs to consider its long-term strategic options to reduce dependence on U.S. automakers, argues Adam Radwanski.Jacques Boissinot\/The Canadian Press<\/p>\n

Canada is stuck in an increasingly abusive relationship with the three traditional North American automakers.<\/p>\n

And what governments here need to start asking themselves is whether \u2013 and if so, how \u2013 they can get out of it and maintain a robust domestic auto industry.<\/p>\n

It\u2019s a question that should be top of mind following this week\u2019s announcement by Stellantis NV STLA-N<\/a> that it\u2019s moving Jeep Compass production<\/a> from Brampton, Ont., to Illinois \u2013 deference to U.S. President Donald Trump<\/a> that prompted a furious reaction<\/a> from Canadian politicians.<\/p>\n

But it\u2019s been at least two decades in the making \u2013 a period during which General Motors Co. GM-N<\/a>, Ford Motor Co. F-N <\/a>and Stellantis (the European parent company of erstwhile American giant Chrysler) have shrunk operations here, while perpetually holding Canadian policy makers hostage with demands for public funds.<\/p>\n

U.S. automakers on track to pay $10-billion in tariffs by end of October<\/a><\/p>\n

In 2007, per data compiled by the Trillium Network for Advanced Manufacturing, the three automakers assembled nearly 1.7 million vehicles in Canada \u2013 down from a 1990s peak. That was the last year before the recession during which Ottawa and Ontario (where the industry is based) committed nearly $14-billion to bailing out GM and Chrysler, including billions in written-off loans. <\/p>\n

Those governments have since committed billions more in subsidies that the companies demanded not just for new facilities, but to keep existing ones open. <\/p>\n

In return, the annual production total is down to around 600,000 cars, in a good year. Some long-standing facilities have been shuttered or indefinitely suspended; others, including the GM Oshawa plant once one of the industry\u2019s pillars, have been dramatically scaled back, putting thousands out of work.<\/p>\n

Along the way, the companies\u2019 value to Canada relative to other automakers has eroded. In 2007, they accounted for about 70 per cent of Canadian-made vehicles, while Japan\u2019s Toyota Motor Corp. TM-N<\/a> and Honda Motor Co. HMC-N<\/a> made up the rest. Now those percentages have almost completely flipped. <\/p>\n

Open this photo in gallery:<\/a><\/p>\n

Honda CR-Vs and Civics leave the company’s plant in Alliston, Ont.Fred Lum\/The Globe and Mail<\/p>\n

And yet, while the two Japanese giants have generally been better corporate citizens \u2013 maintaining stable and supportive presences in towns where they\u2019ve put down roots, and being less cutthroat in demanding subsidies (even if they still take them when available) \u2013 the U.S.-based companies have maintained an outsized squeaky-wheel influence.<\/p>\n

It\u2019s been on display lately in public positioning, via their industry association, around an electric-vehicle transition they\u2019ve largely botched so far. Much more stridently<\/a> than the Japanese companies, they\u2019ve opposed the federal EV sales mandate \u2013 which Prime Minister Mark Carney<\/a> has obligingly suspended \u2013 while being among the most vocal opponents of reducing tariffs on Chinese EVs. In effect, they\u2019re claiming lack of EV demand would be devastating for them if they\u2019re compelled to try to meet it, while also tacitly acknowledging there is demand that others could meet.<\/p>\n

None of this means Canada can or should turn away from them altogether now. Each still has operational assembly plants \u2013 or, in Ford\u2019s case, the Oakville plant where retooling remains under way \u2013 that are important to communities and Canadian-owned companies in the domestic auto parts sector. There\u2019s also the EV battery plant that Stellantis has built in partnership with LG Energy Solution in Windsor.<\/p>\n

But the relationship won\u2019t get much better amid Mr. Trump\u2019s tariffs and other bully tactics targeting manufacturing outside the U.S. If anything, all of it \u2013 suspensions, closings, financial and policy demands, victim-blaming \u2013 will get worse.<\/p>\n

So while still engaging with these companies when necessary, this is the time for Ottawa to start considering other long-term strategic options to reduce dependence on them \u2013 of which there is no shortage, even if each comes with its share of challenges and obstacles.<\/p>\n

The most pressing, though contentious, place to start is with the China<\/a> question.<\/p>\n

Canada\u2019s auto industry has faced struggles before. We endured then and can endure now<\/a><\/p>\n

Few people in the industry seriously believe Canada will be able to keep out Chinese EVs forever, if they continue to be cheaper and better-made than Western products (not to mention if blocking them hurts other industries because of retaliatory action). <\/p>\n

So the question to be asked is whether China would embrace a build-where-you-sell model \u2013 possibly involving duty remissions, a mechanism Canada once used to attract Japanese manufacturing, in which tariffs are waived or reduced in return for manufacturing investments.<\/p>\n

That may not be something Mr. Carney can immediately embrace, given how much it would poke Mr. Trump, and it\u2019s unclear how much interest China would have in making cars here if it couldn\u2019t access the U.S. market. But it\u2019s a scenario that at least needs to be fully explored.<\/p>\n

So, too, does the question of what (if anything) would get other overseas automakers to set up shop here. South Korean companies, conceivably looking to diversify from the U.S. after last month\u2019s bizarre immigration raid<\/a> on a Hyundai plant in Georgia, are obvious potential targets; so are European ones, after Volkswagen\u2019s initial foray with its battery plant under construction in St. Thomas, Ont. It\u2019s possible duty remissions could be used for this purpose, too, although Ottawa\u2019s enthusiasm to otherwise impose tariffs on imports from friendly countries might be limited.<\/p>\n

Then there\u2019s the idea of Canada trying to start its own automaker, which Flavio Volpe \u2013 who heads the association for domestic parts makers \u2013 has been pushing<\/a>. It tends to be met with eye rolls by other industry veterans, but shouldn\u2019t be dismissed out of hand as EVs change market and manufacturing dynamics.<\/p>\n

These and other strategic options aren\u2019t mutually exclusive; in fact, they could be complementary. If an all-Canadian automaker isn\u2019t realistic, for instance, there\u2019s the possibility of EV-making partnerships between domestic entities and foreign ones that aren\u2019t here yet.<\/p>\n

Opinion: Twin crises threaten Canada\u2019s auto industry \u2013 but one is entirely within our control<\/a><\/p>\n

There\u2019s little downside risk to putting some resources into determining which pathways work. And that\u2019s more than can be said for another option that inevitably comes up when the auto sector takes a dark turn despite the billions poured into it, which is just to give up on it or accept a much lesser version.<\/p>\n

Set aside, even, the issue of the many thousands of direct and indirect jobs at stake. A country pursuing greater economic sovereignty can\u2019t afford to give up on the industry that best serves as underpinning for other manufacturing \u2013 be it when more medical equipment suddenly needs to be produced during a pandemic, or to leverage capabilities toward a new military industrial complex that Ottawa wants to build.<\/p>\n

But that industry can\u2019t be contingent on companies that are clearly much less interested in Canada than Canada is in them. We deserve better. <\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Ottawa needs to consider its long-term strategic options to reduce dependence on U.S.…\n","protected":false},"author":2,"featured_media":192711,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-222259","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/222259","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=222259"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/222259\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/192711"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=222259"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=222259"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=222259"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}