Ontario Invests in Automotive Sector

Blake, Cassels & Graydon LLP

Southwestern Ontario is the top ranked vehicle assembly jurisdiction in North America and is also a leading technology hub. The automotive sector in the province accounts for over 100,000 jobs and supports many more in the supply chain. Ontario’s budget, released on March 24, 2021, includes a focus on investment in the automotive sector with a special focus on new technologies.
Below are five ways that Ontario is Driving Forward:

  1. Long-term Plan. In 2019, the Province of Ontario (Province) announced a long-term plan, called Driving Prosperity: The Future of Ontario’s Automotive Sector, aimed at ensuring that the Province’s automotive sector remains globally competitive and continues to grow. The plan includes three pillars: a competitive business environment, innovation and talent. The automotive sector-related announcements made in the budget were explicitly tied to this long-term plan.

  2. Leading Electrification of the Industry. In October 2020, Ford Motor Company of Canada (Ford) reached a transformative and industry leading deal with labour and all levels of government. The Province announced that it was matching the federal government’s investment of C$295-million to help retool the Ford Oakville Assembly Complex into a global hub for battery electric vehicle production. The C$1.8-billion in funds committed by Ford and various levels of government is one of the most significant investments in the sector in Ontario, preceding a series of large investments announced by other major manufacturers.

  3. More Investment. Following the news of Ford’s investment, Stellantis announced an investment of up to C$1.5-billion to support the assembly of plug-in hybrid vehicles and battery electric vehicles at its Windsor Assembly Plant. Additionally, General Motors announced a C$1-billion investment to create a large-scale commercial electric vehicle manufacturing plant at its Ingersoll facility and up to C$1.3-billion to reopen its Oshawa Assembly Plant and support added production at its St. Catharines facility.

  4. Funding of Innovation. The Province announced a C$56.4-million investment over the next four years to create the Ontario Vehicle Innovation Network (OVIN), which is intended to build on the already created Autonomous Vehicle Innovation Network. The Provinces will mandate OVIN to accelerate the development of next generation electric, connected, and autonomous vehicles and mobility technologies, as well as support the Province’s role as the manufacturing hub of Canada. OVIN will be charged with encouraging innovation and collaboration through partnerships with small and medium-sized enterprises, academia, the automotive industry and the battery sector, with the goal of continuing to lead on electric and autonomous vehicle research and technologies.

  5. Covid-19 Related Support. Covid-19 and the resulting lockdowns represented a real challenge for the thousands of small businesses that support the Province’s automotive sector. Ontario’s budget included a C$1.7-billion commitment to provide a new round of cash grants ranging from C$10,000 to C$20,000 for businesses that can prove their revenue was impacted by the lockdowns.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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