Ontario’s automotive sector is at a critical inflection point. North American auto manufacturing is highly integrated, meaning minor disruptions can trigger widespread negative effects throughout the supply chain. But with the United States targeting Canada’s manufacturing sector, government needs to be prepared to take critical action to protect the economy, particularly Ontario’s automotive manufacturing footprint.
Decisive action is required to protect jobs, bolster investment, and secure long-term competitiveness. In consultation with the sector’s leaders, we have developed strategic actions that the federal and provincial governments should take to strengthen the sector’s resilience and safeguard Canada’s hard-earned position as a North American leader in automotive manufacturing.
Measures to Secure Long-Term Competitiveness
- Remove the U.S. IRA condition on recent EV investments
- Establish a “Roots in Ontario/Canada” program
- Streamline approvals for manufacturing investments
- Harmonize regulations or enable mutual recognition
- Offer capital gains tax exemption for investments in Canadian companies
Potential Emergency Measures in Response to Shifting U.S. Trade Policies
- Introduce an emergency tariff offset program targeted to auto manufacturers
- Avoid specialized intermediate goods when imposing retaliatory tariffs
- Introduce rebates, HST exemptions, and discounts to strengthen domestic demand
