Harper Government Invests in Ontario's Auto Sector, Creating and Maintaining over 8,000 High-Quality Jobs

CAMBRIDGE, ONTARIO--(Marketwired - July 31, 2015) - Industry Canada

The automotive industry is essential to the long-term economic growth of Ontario. The Harper Government understands that in order for Ontario's automotive sector to continue to be a global leader, companies require the right conditions to grow their businesses and create jobs here in Canada.

Today, the Honourable Gary Goodyear, Minister of State for the Federal Economic Development Agency for Southern Ontario, announced a $59-million investment in Toyota Motor Manufacturing Canada for the company to upgrade its facilities in Cambridge and Woodstock, Ontario.

Toyota will equip its Cambridge South plant with new machinery that will allow it to produce two next generation Lexus SUV models and equip its Woodstock plant with equipment capable of building lightweight aluminum parts that improve fuel efficiency. The production of lightweight technology is an exciting advancement for the Ontario automotive industry because Canada will be well positioned to export these lightweight, fuel-efficient parts to the United States.

While the automotive industry continues to be highly competitive, companies like Toyota are choosing to take advantage of Canada's low taxes, global trade opportunities and skilled workforce.

Quick facts

• To date, the Government of Canada has committed close to $367 million for seven Automotive Innovation Fund (AIF) projects and leveraged up to $2.77 billion in further sector investments to bring innovative, more fuel-efficient vehicles to market.
  
  
• Toyota is one of Canada's largest automotive manufacturers, operating three assembly lines in Ontario and producing 579,000 vehicles annually.
  
  
• Toyota's Cambridge plant is the only North America facility to produce the Lexus vehicle.
  
  
• The automotive manufacturing sector continues to be critical to the Canadian economy. It contributed 10 percent of manufacturing GDP and 13 percent of merchandise exports in 2014.
  
  
• The automotive sector employs about 121,500 Canadians directly and another 390,700 indirectly in distribution and after-market sales. In Ontario alone, the sector contributes $16 billion to the economy and accounts for almost 21 percent of its manufacturing sector.
  
  

Quotes

"Canada's automotive sector is a global leader in vehicle production and our government is proud to support projects that promote Canada as a destination for future automotive investment. Today's announcement will create future jobs in the Ontario automotive industry and will maintain Toyota's existing employment levels at its Cambridge and Woodstock plants. Our government will continue to support policies that help create well-paying, high-quality jobs and grow the Canadian economy."

- The Honourable Gary Goodyear, Minister of State for the Federal Economic Development Agency for Southern Ontario

"Over the past three years, we have invested more than $1 billion in capital expenditures at our Canadian manufacturing facilities. The spending we are announcing today, along with recent investments in other aspects of our Canadian operations, demonstrates our ongoing commitment to this country, to our team members and to the community in which we do business. The new technology we're bringing here will ensure Toyota Motor Manufacturing Canada continues to lead the way."

- Brian Krinock, President, Toyota Motor Manufacturing Canada

Related product

- Backgrounder

Associated link

- Toyota Motor Manufacturing Canada

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BACKGROUNDER

Automotive Innovation Fund Investment Announcement

Toyota Motor Manufacturing Canada

Introduction

The Government of Canada is committed to creating jobs, growth and long-term prosperity and to keeping Canada's automotive manufacturing sector globally competitive and innovative.

To this end, on July 31, 2015, the Honourable Gary Goodyear, Minister of State (Federal Economic Development Agency for Southern Ontario), announced a repayable contribution of up to $59 million through the Automotive Innovation Fund (AIF) to Toyota Motor Manufacturing Canada (TMMC), a subsidiary of Toyota Motor Corp. The funding will create and maintain over 8,000 high-quality jobs in southwestern Ontario, in addition to bringing leading-edge technologies to Canada.

About the project

Toyota Canada is investing in a project to use advanced lightweight materials to secure production of Lexus vehicles in Canada. The project will provide short- and long-term economic benefits. It will lead to the creation and retention of over 8,000 high-quality, well-paying jobs, opportunities in research and development, and increased activities within the Canadian automotive supply chain. Federal funding for the project is provided through the Automotive Innovation Fund. The funding will support innovative technologies in Toyota's Canadian facilities, with the Cambridge facility to be the first in Toyota's North American network to receive the upgrades.

The Cambridge plant will see the adoption of new laser-welding robots to produce faster high-quality welds that enhance vehicle rigidity and, by extension, handling. The Woodstock plant will receive a new stamping line capable of stamping aluminum, a material rapidly becoming popular among automakers due to its light weight. Aluminum parts contribute to greater fuel efficiency.

About Toyota Motor Manufacturing Canada

Based in Cambridge and Woodstock, Ontario, Toyota Canada is one of this country's major automotive manufacturers. The company operates three assembly lines in Ontario (two in Cambridge, one in Woodstock). The three lines employ more than 8,000 workers and produce more than 579,000 vehicles annually. In fact, the Cambridge plant is Toyota's only facility outside Japan to manufacture the Lexus vehicle.

About the Automotive Innovation Fund

The government first introduced the Automotive Innovation Fund (AIF) in Budget 2008, providing $250 million over five years. On January 4, 2013, Prime Minister Harper announced the renewal of the AIF.

The renewed fund is providing $250 million over five years (2013–2018) to automotive companies in Canada in support of strategic, large-scale research and development (R&D) projects. In Budget 2014, the government announced another $500 million over two years for the AIF.

The AIF aims to:

• build automotive R&D capacity in Canada and secure high-value jobs;
  
  
• enhance the government's science and technology and environmental agendas;
  
  
• support the development, implementation and commercialization of advanced and green technologies and advanced products or processes;
  
  
• promote long-term economic benefits to Canada, including significant job creation and retention; and
  
  
• serve as a catalyst for further private sector investments to foster Canadian competitiveness.
  
  

AIF support has leveraged up to $2.7 billion in R&D and innovation investments in Canada's automotive sector and is contributing to:

• the development and commercialization of new products;
• advanced and expanded flexible manufacturing processes and facilities;
• enhanced R&D capacity;
• leading-edge engineering and design; and
• made-in-Canada innovation.

To date, the AIF has provided repayable contributions to four companies, including up to:

• $80 million toward an investment of up to $730 million by Ford Motor Company of Canada to establish a flexible engine assembly plant and create an advanced powertrain research centre in Windsor, Ontario;
  
  
• $54.8 million toward an investment of up to $365 million by Linamar Corporation to develop and commercialize advanced components and modules in three product areas: transmissions, engines and drivelines;
  
  
• $70.8 million toward an investment of up to $506 million by Toyota Motor Manufacturing Canada to maximize production efficiency, reduce emissions and upgrade equipment to permit the production of more fuel-efficient vehicles including electric vehicles;
  
  
• $21.7 million toward an investment of up to $199 million by Magna International to develop energy-efficient components for vehicles and innovative powertrain components for next-generation vehicles;
  
  
• $16.8 million toward an investment of up to $120 million by Toyota Motor Manufacturing Canada to establish an assembly line for the new Lexus RX450h hybrid, supporting hybrid expertise in the Canadian supplier base, and to increase capacity for the RX350 model in Cambridge, Ontario;
  
  
• $71.6 million toward an investment of up to $716 million to install a state-of-the-art global manufacturing platform at Ford Motor Company of Canada's Oakville Assembly Complex and to conduct fuel consumption and emissions R&D; and
  
  
• $50.7 million towards an investment of $507 million by Linamar Corporation to develop fuel-efficient automotive transmissions.
  
  

Canada's approach to creating a competitive automotive industry

Canada has much to offer the automotive manufacturing industry: the Automotive Innovation Fund and the Automotive Supplier Innovation Program, a large and sophisticated supply cluster, the new Gordie Howe bridge linking Windsor and Detroit by 2020, access to generous support for automotive R&D, a stable economy, low corporate taxes, a highly skilled and productive workforce, well-developed infrastructure, access to numerous markets due to our free trade agreements and a favourable environment for automotive success.

The AIF is part of the government's broader approach to create economic conditions that support a strong Canadian auto industry. The government's approach also includes a fiscal and economic framework that will keep the industry competitive, including:

• a sound banking system;
  
  
• the lowest overall tax rate on new business investment in the G7;
  
  
• the lowest debt-to-GDP ratio in the G7;
  
  
• a triple-A credit rating; and
  
  
• investments in automotive R&D.