Canada is in a prime position to help the auto industry through a technological revolution, according to a new report.
The report comes from Ray Tanguay, the former head of Toyota’s Canadian operations who now acts as a special adviser to the federal and Ontario governments on the automotive file.
In it, Tanguay outlines the reasons behind the decline in Canada’s auto sector over the past decade-plus and what he sees as the solution toward maintaining and growing the industry’s presence in the country.
He notes that employment in auto manufacturing declined greatly in the second half of the 2000s. While it has rebounded somewhat this decade, it remains below 2008 levels.
Additionally, Canada has been shut out of new auto plants. Of the 16 plants built in North America since 2006, 10 have been in Mexico and six in the southern United States.
Tanguay says this is due to the Canadian dollar being higher than it was in the early 2000s, leading to higher labour costs and convincing automakers to look at cheaper locations.
While that is considered a major issue for manufacturers, Tanguay says Canada and Ontario score well when it comes to safety, quality and productivity, which can somewhat cushion the effect of higher wages.
He says Canada can chart a path forward by realizing that it is “incredibly well positioned” to help automakers come up with “the car of the future,” which he sees as the next major step for the industry.
Specifically, Tanguay sites Canada’s strength in fields such as software development, data analysis, artificial intelligence and cybersecurity as key for automakers’ future plans.
“These capabilities, backed by our talent pool and access to globally recognized researchers, are putting Canada on the map,” the report reads.
Tanguay recommends growing Canada’s auto sector by focusing on three key areas: investing in advanced technologies and infrastructure, remaining a competitive location for manufacturing operations, and developing the auto workforce by expanding apprenticeship programs and creating new incentives for on-the-job training.
According to the report, the auto industry employs 126,900 Canadians directly and more than 400,000 others indirectly. It manufactures 2.4 million vehicles per year, or one every 13 seconds.
