{"id":667817,"date":"2026-05-14T00:45:12","date_gmt":"2026-05-14T00:45:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/667817\/"},"modified":"2026-05-14T00:45:12","modified_gmt":"2026-05-14T00:45:12","slug":"canadas-auto-industry-at-inflection-point-dependant-on-u-s-free-trade-report","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/667817\/","title":{"rendered":"Canada\u2019s auto industry at \u2018inflection point\u2019 dependant on U.S. free trade: report"},"content":{"rendered":"

Canada\u2019s auto industry<\/a> is at an \u201cinflection point\u201d and a new report suggests its future success hinges on restoring free trade with the U.S.<\/p>\n

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The report by RBC, released Tuesday, looked at four paths to determine options the industry could take, but also the trade-offs that would come with them.<\/p>\n

\u201cCanada is at a strategic crossroads when it comes to the future of its auto industry and essential to that future is securing free trade with the United States,\u201d said Jordan Brennan, managing director at RBC Thought Leadership and author of the report, in an interview.<\/p>\n

In its most optimistic scenario, the report says tariff-free access to the U.S. could lead to its volume increasing to two million units by 2040. But at the other end, its most pessimistic outlook would see auto assembly plants shut down or leave the country by the same year, the report said.<\/p>\n

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In the latter scenario, auto provisions under the Canada-U.S.-Mexico Agreement would be scrapped or severely weakened and, eventually, plants would leave.<\/p>\n

\u201cWe must maintain the automotive manufacturing supply chain and footprint that we have in this country or we will not have any hope of securing any sort of other automotive activity in Canada,\u201d said Brian Kingston, president and CEO of the Canadian Vehicle Manufacturers\u2019 Association (CVMA). \u201cThe plant itself creates thousands of jobs, but then you have all of these spin-off jobs related to the supply chain.\u201d<\/p>\n

Kingston stressed it\u2019s why efforts must be made to find a deal with the U.S., adding that he\u2019s optimistic that one can be met, as Canada is an important market for the U.S. auto industry.<\/p>\n

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But the report outlined tariffs are only one issue facing the auto industry.<\/p>\n

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The drop in electric vehicle sales, the increase in software-loaded cars, a decrease in sales in the market and China increasing its presence as a seller are all playing a role.<\/p>\n

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\u201cHow can Canada, whether it\u2019s governments or its auto sector itself, how can they navigate through these difficult paths?\u201d said Brennan. \u201cIt does seem difficult to say, \u2018OK, are we going to get tariff-free here or are all the jobs going to be lost to automation?\u2019 \u2026 We\u2019re at an inflection point.\u201d<\/p>\n

One option the report put forward was Canada turning to Eurasia for investment, keeping modest tariffs on Chinese imports but diversifying the industry, such as by trading market access for investment through its remission framework.<\/p>\n

Yet while Brennan notes Prime Minister Mark Carney\u2019s government is exploring how to leverage market access, industry leaders such as the CVMA say it\u2019s difficult.<\/p>\n

\u201cThe idea that you would attract investment from manufacturers in other parts of the world to build here and then export to Asia or Europe, it doesn\u2019t make commercial sense, it doesn\u2019t make economic sense,\u201d Kingston said. \u201cCompanies that want to service other markets outside of North America will do so through the plants that they have in Europe or that they have in Asia.\u201d<\/p>\n

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While he stressed the need for an end to tariffs, Kingston did not rule out that increasing Canada\u2019s battery supply chain could be another method, saying the country has the resources, such as critical minerals, that could help us become a major supplier.<\/p>\n

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Some auto-making cities have looked at batteries, including the recently opened NextStar Energy\u2019s plant, but others are looking at other products to succeed. Last year, Toyota invested $1.1 billion in Ontario operations, including launching production of a RAV4 hybrid in Woodstock.<\/p>\n

\u201cThey have a 10-year plan and they\u2019ve kind of been sticking to that the entire time I\u2019ve ever met with them,\u201d said Woodstock Mayor Jerry Acchione. \u201cWe have probably at least a five, six, maybe seven-year production cycle of this model year. So that brings that stability here.\u201d<\/p>\n

Tariffs are still affecting other products like steel or aluminum, but he said it\u2019s also led to outreach opportunities with international companies. But he added that Toyota is leading a change in technology, investing not only in the making of the vehicles themselves but also in what goes inside them.<\/p>\n

The RBC report noted Canada should shift its automotive policy by expanding from assembly volumes to advances in automation and the value of engineering and software inside the vehicles.<\/p>\n

Brennan says in his report that the future of the auto sector will be \u201cmost likely\u201d some combination of different paths put forward, but action will need to be taken because impacts to the industry can be far-reaching.<\/p>\n

\u201cAuto is not an industry, it\u2019s an ecosystem and so the assembly plants, they anchor that ecosystem,\u201d Brennan told Global News. \u201cIf the assembly plants were to close or move to the United States, a lot of tier one, tier two, tier three parts suppliers would migrate with themselves (the auto plants) or close.\u201d<\/p>\n

\n\t\t&copy 2026 Global News, a division of Corus Entertainment Inc.\t<\/p>\n","protected":false},"excerpt":{"rendered":"Canada\u2019s auto industry is at an \u201cinflection point\u201d and a new report suggests its future success hinges on…\n","protected":false},"author":2,"featured_media":667818,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[22323,34716,45,49,48,46,4992],"class_list":["post-667817","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-auto-industry","tag-auto-sector","tag-business","tag-ca","tag-canada","tag-economy","tag-tariffs"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/667817","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=667817"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/667817\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/667818"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=667817"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=667817"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=667817"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}