Toronto, May 7, 2007 -- Canadian Automotive Partnership Council (CAPC) members met on Friday, May 4, to discuss key issues affecting the ongoing competitiveness of the Canadian auto industry.
Don Walker, Co-Chief Executive Officer, Magna International and CAPC Chair said, "I'm very encouraged to see the level of engagement of the federal and provincial ministers and their interest in asking for the industry's input on approaches which would ensure the continued growth and competitiveness of this key industry, while safeguarding the environment. Our members highlighted that over 570,000 jobs and $10 billion in annual tax revenue depend on a healthy automotive sector."
CAPC members expressed a range of views on the many issues and challenges faced by the automotive industry in Canada. Members discussed concerns about the pace of progress towards increased regulatory cooperation across North America, the implications of a possible Canada-Korea free trade agreement, the proposal by the federal government to regulate fuel consumption, and the approach to consumer incentives and levies announced in the last federal budget. Members expressed particular concern about the plans of several provinces to establish their own regulations on fuel emissions. CAPC members were unanimous in calling for one national fuel consumption standard, harmonized with the US standard. Ministers Bernier and Pupatello agreed on the need for one national standard and undertook to raise this issue with their federal and provincial colleagues.
During the meeting, members noted the accelerated Capital Cost Allowance announced in the recent federal budget and the Ontario government's commitment to support environmental R&D as examples of government actions in support of CAPC's strategy to attract investment and ensure the Canadian auto sector remains strong and internationally competitive. Members also called for increased cooperation across governments and closer cooperation with the US in addressing the key issues raised by the CAPC membership. CAPC recommended that governments ensure a competitive tax regime and business environment, a greater degree of harmonization with the US in setting safety and environmental regulations, as well as a fair international trade regime.
The Honourable Maxime Bernier, Canada's Minister of Industry, stressed the significant contribution of the industry to employment and economic growth in Canada and noted that, despite ongoing challenges, automotive sales and investment reached record levels in Canada last year. "Budget 2007 demonstrates the government's commitment to addressing automotive sector interests, in providing generous capital cost allowances, significant investments in gateway and transportation infrastructure and measures to foster innovation and green technologies," said Minister Bernier. The Minister underscored the role of stakeholders in providing input to the development of a Canadian regulatory agenda. "We are committed to ensuring that industry competitiveness is respected and that the health and safety of Canadians is not compromised," added Minister Bernier.
"Through our auto strategy, the McGuinty government has leveraged more than $7 billion in new investments that will create thousands of jobs and help position Ontario's auto industry for long-term competitiveness," said Ontario Minister of Economic Development and Trade Sandra Pupatello. "Friday's discussion focused on how we build on this success while helping the industry meet the near-term challenges of a major global restructuring and the need for improved environmental sustainability. We continue to encourage the federal government to develop national initiatives that contribute to the strengthening of our automotive industry," added Minister Pupatello.
Roger Martin, Dean of the Rotman School of Management at the University of Toronto, also attended the meeting and led a discussion on Canadian competitiveness.
CAPC's seven working groups reported on progress on their priority issues to the council. The working groups are: fiscal/investment policy, human resources, innovation, regulatory compatibility, sustainability, trade infrastructure and international trade.
CAPC will meet again in fall 2007.
ABOUT THE CANADIAN AUTOMOTIVE PARTNERSHIP COUNCIL
The Canadian Automotive Partnership Council is a private sector-led group, which was launched in September 2002. It includes senior executives from industry (vehicle assembly, parts manufacturers, aftermarket and dealers), labour and academia, as well as the industry and economic development ministers from the Governments of Canada, Ontario and Quebec. The mandate of the Council is to identify actions to strengthen the Canadian automotive industry in the short and long term.
For more information, please see the CAPC fact sheet outlining the important work being undertaken by the membership at our website http://capcinfo.ca.
Media contacts:
CAPC private sector (for Don Walker): David Paterson, (905) 644-6308 or
Lori Shaloub, (519) 973-2101
Government of Canada: Isabelle Fontaine, (613) 995-9001 or
Media RelationsIndustry Canada, (613) 943-2502
Province of Ontario: Phil DeMont, (416) 325-6706
Province of Quebec: Madeleine Caron, (418) 691-5656
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ABOUT CAPC
The Canadian Automotive Partnership Council (CAPC) was formed in September 2002. Consisting of key automotive industry stakeholders, CAPC provides a forum for industry, government, labour and the research community to discuss common issues and identify a course of action to strengthen Canada's automotive industry.
CANADA'S AUTO INDUSTRY AT A GLANCE
6 light-duty vehicle assemblers operating 11 assembly plants
11 medium/heavy-duty truck and bus assemblers
21 light duty vehicle manufacturers and distributors
550 plus original equipment manufacturers (OEMs)
3960 plus auto dealers in every community across Canada
Thousands of service providers and parts retailers in every province and territory
CANADIAN AUTOMOTIVE INDUSTRY
Quick Facts
1. Canada's auto industry is more than 100 years old.
2. In producing over 2.5 million light-duty vehicles annually, Ontario is the leading jurisdiction for auto production in North America and is the 10th largest globally.
3. 570,000 Canadians from coast to coast are directly employed in the auto industry.
4. Each of the 50,000 assembly jobs provides 7-10 spin off jobs (the highest ratio of any manufacturing industry sector).
5. Tax revenues from the auto industry to all levels of government in Canada total over $10 billion annually.
6. Since 2002, Canadian vehicle assemblers and parts manufacturers have invested over $10 billion in production and research and development.
7. Canada's auto industry exports 85% of all production roughly $100 billion annually; every $1 million in exports creates and sustains 5 jobs.
8. With an average annual salary of $72,000, auto workers pay an average of $22,480in federal and provincial taxes.
9. Canadian companies are global leaders in R&D on light-weight materials, alternative fuel technologies and occupant safety.
10. One 1987 model year car produces as the same emissions as 37 new cars. There are over 1 million 1987 model year or older cars on Canadian roads.
ENVIRONMENTAL LEADERSHIP
In 2005 Canada's auto industry voluntarily agreed to reduce greenhouse gas emissions from Canada's vehicle fleet by 5.3 million tonnes by the end of 2010 (exceeding the GHG reduction goal of 2002 Climate Change Plan).
Vehicles sold in Canada are among the cleanest in the world. It would take twelve 2007 model-year cars to produce the same emissions produced by one 1993 model-year and 37 new cars to produce as much as just one 1987 car.
By the end of 2007, Canada's automakers will make available over 70 different advanced technology vehicles (ATVs) and over 30 alternative fuel vehicles (AFVs), several of which are produced in Canada.
Improvements in Canadian automotive manufacturing processes have reduced Volatile Organic Compound (VOC) emissions from assembly plants by over 50% on a kg/vehicle basis from 1990 to 2002. Today's Canadian assembly plants do not register in a ranking of emissions intensity across key industrial sectors.
Energy conservation achievements at Canadian manufacturing facilities also rank among the highest across many industry sectors.
Environmental considerations begin at the vehicle design process including the selection of materials that go into building a vehicle. New vehicles are almost 90% recycled and among the most recycled of any consumer products. Increasing attention is now focused on the introduction of bio-materials from plants into parts and components.
ECONOMIC CONTRIBUTION TO CANADA
Procures $40 billion plus annually from Canadian suppliers (more than twice the total annual amount of the Canadian federal government's annual procurement).
Accounts for 12% of Canada's manufacturing GDP and over 20% of Canada's total yearly merchandise trade, in excess of $150 billion annually.
Over $30 billion in parts and components shipments annually.
RESEARCH, EDUCATION AND INNOVATION
Every year the auto industry conducts over $500 million in R&D related to assembly, innovation, new vehicle development, alternative fuels and vehicle safety.
Partnerships: 260 top researchers at 42 academic institutions, government research facilities and private sector research labs across the AUTO21 network including Georgian College (Barrie), St. Clair College (Windsor), the University of Windsor, the University of Ontario Institute of Technology (Oshawa), the University of Waterloo, McMaster University and the University of Toronto.
COMPETITIVE CHALLENGES
Significant appreciation of the Canadian dollar relative to the U.S. dollar.
Intensified international competition from low-cost geographies.
Mandated environmental controls and regulatory disharmony between Canada and the U.S.
Trade and border infrastructure.
Global production over-capacity.
