Federal Automotive Strategy Must Prioritize Domestic Manufacturing, Report Argues
A newly released analysis is urging the federal government to redesign its automotive strategy to explicitly reward and incentivize vehicle production within Canada. The report emphasizes that for the nation's auto sector to remain competitive and economically vital, policy must shift to directly support domestic manufacturing operations.
Focus on Retaining and Growing Canadian Production Capacity
The core recommendation centers on creating a strategic framework where federal support, including potential subsidies, tax benefits, and research funding, is contingent upon maintaining and expanding production footprints in Canada. This approach aims to counteract global competitive pressures and secure high-value jobs and technological development within the country's borders.
The analysis suggests that without clear financial incentives for local assembly and parts manufacturing, Canada risks losing further ground in the rapidly evolving global automotive landscape. The transition to electric vehicles (EVs) and advanced manufacturing presents both a challenge and an opportunity to anchor new investments domestically.
Aligning Policy with Economic and Innovation Goals
Beyond job retention, the report frames a production-focused strategy as essential for fostering innovation. It argues that sustaining full manufacturing ecosystems—from assembly plants to supply chains—is crucial for driving research in areas like battery technology, connected vehicles, and autonomous systems.
The proposed model would require automakers to meet specific Canadian production thresholds or investment commitments to qualify for maximum federal support under any new industrial policy. This marks a potential shift from broader industry support to more targeted, performance-based incentives.
The call to action comes as governments worldwide deploy aggressive strategies to attract and secure automotive investments, particularly in the EV sector. The report concludes that a passive Canadian strategy could lead to further erosion of the nation's industrial base, underscoring the need for proactive, production-centric policy measures to ensure long-term sector resilience and growth.
