Toyota’s Cambridge, Ontario plant will have the honor of being the sole facility outside Japan to produce hybrid Lexus RX crossovers. The announcement came alongside plans for an investment of $34 million investment from the Canadian government.
The Ontario government and the Canadian federal government contributed $17 million each to help upgrade the plant and add 400 jobs. The federal portion comes from Canada’s “Innovation Fund”, a $250 million fund that is being used to provide investment in the auto industry at a time when many auto makers, particularly from the Detroit Three, are complaining about excessive labor costs and a high Canadian dollar to makes it difficult to do business in Canada.
A report by the Windsor Star quotes Tony Faria, an auto industry expert and University professor, as he outlines the challenges faced by Canada in attracting new investment
“It’s not unusual for governments in the southern states to assemble the land for a plant, provide the land free, provide all of the upgrades in infrastructure to service the plant, provide training funds for the workforce, tax abatement for 20, 30 years in future, pay directly for part of the plant’s construction — in other words, cover between 33 and 40 per cent of the entire investment the company would be making in the facility.”
Many observers have been calling for increased government investment in the auto industry, while opponents cry “corporate welfare” over the multi-million dollar sums that flow from the government to the auto makers. Your stance on the matter depends on where you stand on the political spectrum. Those with their feet firmly planted on the ground know that in Ontario, auto manufacturing is a big player, and one of the last sources of good jobs that hasn’t been offshored.