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.
