[co-author: Shahrouz Hafez, Student-at-Law]
The Province of Ontario, with a population of over 14 million people and the largest economy in Canada, is home to a rapidly changing automotive sector that built approximately 2.2 million cars in 2017 and employs over 125,000 workers, accounting for 11 per cent of Canada’s manufacturing GDP.
On February 14, 2019, the Ontario government published Driving Prosperity: The Future of Ontario’s Automotive Sector (Driving Prosperity), a 10-year plan with the stated goal of strengthening competitiveness and innovation in Ontario’s automotive sector. The Ontario government’s stated vision set out in Driving Prosperity is to strengthen and build on Ontario’s North American leadership in automotive assembly and parts production, and to position Ontario as a leader in the development, commercialization, and adoption of advanced manufacturing and mobility technologies.
DRIVING PROSPERITY IN ONTARIO
The Driving Prosperity plan contemplates two phases. In phase one, the Ontario government will earmark C$40.2-million over three years to put toward the plan’s three stated pillars:
Creating a competitive business climate
Phase two of the plan, which is intended to be released later in 2019, will address longer-term challenges and opportunities facing the automotive sector.
Creating a Competitive Business Climate
The government’s stated action items in the first pillar are to:
Move to a comprehensive and streamlined approvals and compliance approach for all manufacturing on designated job sites
Increase foreign direct investment into Ontario’s automotive manufacturing industry through Premier-led and/or Minister-led missions
Engage with the auto sector during consultations on industrial electricity pricing
Lessen the regulatory burdens impacting the automotive industry by, for example, improving the transparency and stability of property tax assessments and streamlining the approvals and certification processes for automotive manufacturing sites
Introduce a “job site challenge” competition to municipalities, economic development corporations and industrial developers for a site capable of attracting a new assembly plant.
The government is contemplating another step in order to create a more competitive business climate, which would involve introducing an accelerated approval pathway for the development and deployment of the “next generation” of automobiles and production processes.
The second pillar of the Driving Prosperity plan focuses on providing new support for supply chain modernization and competitiveness, and for connected and autonomous vehicle technologies. Announced initiatives aimed at supporting these goals include:
Launching the Ontario Automotive Modernization Program (O-AMP) to assist automotive parts suppliers to become more productive, innovative and export-focused through the adoption of technology (the O-AMP builds off the Automotive Supplier Competitiveness Improvement Program)
Supporting the creation of new mobility technologies in Ontario by enhancing the province’s Autonomous Vehicle Innovation Network (AVIN), including by launching a “wintertech” development stream to create a test-bed for mobility products and services in severe winter weather conditions.
The final pillar of phase one of the Driving Prosperity plan involves developing a talent roadmap and skills inventory, and the creation of new internship and training opportunities for automotive manufacturing related professions. Some of the announced steps under this pillar include:
Establishing an online learning and training portal dedicated to teaching students the skills needed in automotive manufacturing
Increasing funding to AVIN’s TalentEdge program to support internships and fellowships for Ontario students’ research into connected and autonomous vehicles
Greater collaboration with the automotive industry in skills planning and development, with the aim of ensuring the long-term supply of skilled automotive industry workers.
Automotive original equipment manufacturers, parts manufacturers or automotive technology suppliers should be mindful of the Ontario government’s desire to promote growth and investment in this area. Companies looking to locate or expand their base of operations in Southwestern Ontario’s co-located automotive manufacturing hub and technology supercluster may be able to take advantage of these programs. In addition to the funding of these programs, the Ontario government will want to support growth in the sector given its importance to Canada’s largest economy.
We can expect the Ontario government to focus in its next phase on larger macroeconomic trends that are impacting the automotive industry. Such areas of focus could include: investments targeting the improvement of power grids (and power grid technology); the improvement of existing, and development of new power stations intended to support the larger volume of electric vehicles that are likely to enter the market; and more robust urban planning initiatives aimed at supporting the vehicles of the future, such as a greater frequency, and larger array, of electric charging stations and studying/implementing necessary changes to cities that may be required to support connected and autonomous vehicles.
The Blakes Automotive group will monitor the Driving Prosperity plan and provide updates as they become available, including in respect of the planned release of phase two later this year.