Rocked by GM's Plant Cull, Ontario Seeks to Shore Up Its Auto Sector

General Motors’ decision to stop the flow of product to Ontario’s Oshawa Assembly plant by the end of 2019 has the province’s government promising cash and a slew of measures to keep the auto industry alive north of the border.

Ontario holds the bulk of Canada’s auto-related manufacturing jobs, with the sector adding up to nearly one-fifth of the province’s manufacturing GDP. Vehicles and parts made up 28 percent of its trade exports in 2015. On Thursday, the Ontario government rolled out the first phase of a 10-year plan to firm up the industry and make automakers reconsider Mexican investment.

The volume of Canadian-built vehicles fell by 25 percent since 2000, and GM’s decision to turn the lights out in Oshawa won’t help the trend. At last report, 13 percent of North America’s auto production occurs in Ontario.

Titled “Driving Prosperity: The Future of Ontario’s Automotive Sector,” the plan lays out a number of initiatives, among them: $40.2 million over the next three years for internships, an online learning and training portal, and an automotive modernization program. International promotion is another plank, as are “supports” for R&D and emerging technologies.

Grouped under three pillars — talent, innovation, and competitive business climate — the plan makes no shortage of promises to existing and prospective auto sector companies. Mainly, a potential reduction in the electricity rate for certain manufacturers, a reduction in red tape and a modernization of existing regulations, and a reduction in taxes. If some of those sound like promises made to all companies by conservative governments the world over, you’re right. There’s finer specifics contained in the plan, but that’s the gist. A second phase of the plan should emerge from the Doug Ford government by the end of the year.

Looking through the document, one wonders how a government of any stripe would go about maintaining “current assembly production volume and [securing] new assembly commitments.” No government in this country seems able to compel private manufacturing operations to stay open or expand without a liberal application of taxpayer cash. Well, it certainly appears that way.

Regardless, this government feels it can pull in new auto manufacturing, with a job site challenge being one tool in that strategy. The province describes it as “a competition, open to municipalities, economic development corporations, and industrial developers, for a site (500 to 1,500 acres) capable of attracting a new assembly plant. Ontario would partner with the winning proponent on site-readiness and servicing to ensure the development opportunity is competitive.”

Other tools include “improving the transparency and stability of property tax assessments” and “[streamlining] the approvals and certification process for auto manufacturing sites.”

It’s an effort, anyway — one that could prove successful. Still, one has to wonder what phase two holds.

[Image: Fiat Chrysler Automobiles]