By on January 24, 2013

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.


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8 Comments on “Toyota Gets $34 Million From Canadian Government To Build Hybrids...”

  • avatar

    $34 million is about the budget for a few feasibility studies. Or the annual salaries of three average Fortune 500 CEOs. No car company makes a manufacturing decision dependent on chump change.

    As an executive of another company, who received a similar sized award in a similar situation on a different continent told me: “Of course we didn’t go there because of that money. But while we go there anyway, we won’t turn down the money either.”

  • avatar

    400 more people to assemble an incremental 15,000 units seems quite ‘unlean’. I assume they aren’t doing any actual manufacturing or battery pack subassembly, but even with a bit of subassembly, 400 people is a lot.

  • avatar

    Great news. 400 direct jobs,and and a super ripple effect. Ontario needs this badly. Corporate welfare ? As and Ontario, and Canadian taxpayer, I call it an investment.

    I just hope Toyota will honour thier commitments..

    The guy on the left is a liberal,and the guy on the right is a conservitive. Gee I wonder if that was planned?

  • avatar

    That’s less than $3 from every Ontario resident. I’m opposed to corporate welfare, but this doesn’t seem like a lot. Toyota will be there a long time.

    • 0 avatar

      If it were to bring value to my region, I would gladly pay a $3/annual tax in order to attract/bring industry and subsequent jobs. Things are just rarely that simple.

      Here’s an idea, $5 bucks from every citizen in a region (as in no exceptions) to go into a fund in order to attract/incentivise/bribe new industry to come to said region and here’s the catch… this slush fund is to be only administrated by an elected official of the OPPOSITE party in power of said region.

  • avatar

    A relatively small amount of government money resulting in an positive number of jobs in Ontario? What is this, opposite-day?

  • avatar

    This Plant in Cambridge, Ontario already makes the only Lexus Model(RX350) here, its the only place outside of Japan that any Lexus is manufactured, so I would think that having made a Lexus before here in Cambridge, Toyota know what they are doing as to the workers that build the Lexus RX350.

    On a Tour of this plant a few years ago, they would not let us see where the Lexus was built, we did see the other Toyota makes manufactured there but the Lexus area was not shown to our Tour!

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