Column: Canada’s economic strategy pays off in the form of electric vehicles

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Note: The author will speak at Greater Sudbury’s first battery electric vehicle (BEV) conference, BEV In Depth: From Mining to Mobility, May 25-26 at Science North.

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Brian Kingston

Two years after global investment flows collapsed during the pandemic, Canada has emerged as one of the world‘s top destinations for foreign investment. Nowhere has this been more pronounced than in the automotive industry, which is undergoing a one-of-a-kind transformation towards electrification.

According to the OECD, Canada was the third largest recipient of foreign direct investment (FDI) in the world in 2021 after the United States and China. Canada received US$60 billion in FDI inflows, a 15-year high.

The automotive industry stands out as one of the main drivers of this increase in new investments. Over the past 18 months, Ford, GM and Stellantis have announced $13.5 billion in investments in Canada, creating more than 6,000 direct new jobs and tens of thousands throughout the supply chain. The majority of these investments are in electric vehicle (EV) assembly and the battery supply chain, giving Canada a leading role in building the cars of the future.

These announcements were made possible by a targeted commitment from the federal and Ontario governments to bring new investments to Canada. Federal Minister Champagne and Ontario Minister Vic Fedeli have forged a cross-party relationship that is helping bring unprecedented investment to Canada’s auto sector.

Minister Champagne summed up the relationship recently at an event with Minister Fedeli where he said, “we text each other all the time – and you know who benefits? Well, it’s workers, it’s families, it’s the economy.

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And it’s not just the commitment between governments that has helped land these investments, Minister Champagne’s ongoing industry awareness and willingness to partner with the private sector puts Canada on the map in the global competition for new automotive mandates.

While some may criticize direct public incentives to automakers to attract this investment, the facts are clear – every dollar of public investment is multiplied by an additional four dollars of private investment. More importantly, the incentives will more than pay off in tax revenue generated by companies and the tens of thousands of jobs they support throughout the supply chain.

The combination of our attractive investment climate, supported by programs like the federal Strategic Innovation Fund, and our reputation as a place where environmental, social and governance goals can be achieved, encourages automakers to make big bets on Canada. There is no other country in the world where companies can build vehicles using a renewable energy grid, source mineral inputs from responsible and sustainable supply chains, and access a variety of world-class talent needed new automotive technologies.

Just look at GM’s investment of over $2 billion to transform manufacturing facilities in Oshawa and Ingersoll for proof. GM Canada President and CEO Marissa West summed up the Canadian advantage best, noting that partnering with the governments of Ontario and Canada “helps GM build a more diverse electric vehicle supply chain.” , innovative and sustainable for the future”.

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Most recently, Stellantis announced an additional $3.6 billion investment in Windsor and Brampton to bolster its unprecedented $5 billion investment in a new electric vehicle battery assembly plant. This is in addition to the $1.8 billion investment announced by Ford in 2020 to convert the Oakville assembly complex to manufacturing electric vehicles.

And while these investments alone will make huge contributions to the economy, Canada has the potential to play an increasingly important role in the transition to electrification. Automakers are actively building a more integrated North American supply chain that requires exactly what Canada offers – mineral reserves, sustainable approaches to mining, and smart people to process, recycle and develop them.

This presents a generational opportunity for Canada with its mineral abundance and good fortune since the 1960s to be integrated into the North American automotive market.

Recent government commitments to build critical mining infrastructure and attract new investment in mining and processing are a good start. But governments will need to keep pace with the private sector to unlock economic potential and connect Sudbury and the North’s mineral wealth to the automotive manufacturing supply chain. Underlying all of this is ensuring an integrated North American supply chain approach with harmonized regulations and policies to support EV adoption.

Credit where credit is due. Canada’s economic strategy is working, and the auto industry is in the driver’s seat.

Brian Kingston is President and CEO of the Canadian Vehicle Manufacturers’ Association (CVMA).

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