Auto Sector in Ontario is Accelerating Into The Future

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The future of the automotive landscape is being forged in Ontario. Canada’s most populous province has a vast network of leading auto manufacturers and suppliers, coupled with a dynamic and booming technology sector, and unmatched government support and incentives, making it no surprise that Ontario is already North America’s largest vehicle producing region.

When Canada’s first auto plant was built in St. Catharines, Ontario in 1905, auto manufacturing and assembly was still new to North America. This state-of-the-art plant featured a machine shop with some of the newest and best designs of machine tools available at the time.

Now more than a century later, Ontario has its foot firmly on the gas pedal in preparation for a future of connected and autonomous vehicles powered by next-generation energy systems. The province is home to powerful and innovative post-secondary research, a commitment to building an ecosystem that will drive transformation, and more than 200 companies that are designing cars and their networks to think.

For companies that want to be at the forefront of the revolution underway in the automotive industry, Ontario is the only place to be.

Revving an Economic Engine

Ontario’s auto industry is one of the key drivers of Canada’s economy in terms of employment, imports and exports, and industrial production.

With a $20-billion contribution to the GDP, the auto industry now directly employs more than 125,000 people, with another 400,000 people employed in aftermarket and dealership services.

Ontario’s government is strategically focused on this critical piece of the economy, developing an innovative, forward-thinking plan with a solid commitment to strengthening the province’s automotive sector, now and into the future.

Ontario ’s Reputation is Well Deserved

Ontario boasts a vibrant and interconnected automobile manufacturing ecosystem that includes one of only five machine-tool-die-and-mould making clusters worldwide and nearly 700 parts suppliers, led by notable domestic giants such as Magna International, Linamar and Martinrea. Ontario is one of the world’s top 10 regions for the production of light ehicles and the only place in North America where five major automakers assemble vehicles. Ford, GM, Fiat Chrysler, Honda, Toyota, as well as the truck manufacturer Hino, assemble more than 2 million vehicles at their Ontario plants each year.

The benefits Ontario offers are not replicated anywhere else. Ontario automotive operations enjoy generous R&D tax benefits and corporate tax savings. The province also offers lower total labour costs than the U.S., including lower healthcare costs for employees. Costs for leasing offices and industrial facilities and utilities, such as electricity and natural gas, are also lower than in most G7 countries.

Foreign direct investment in the auto industry is vital in a globally competitive world. Direct investment in Canada rose to US$14 billion in the second quarter of 2019, according to Statistics Canada. Canada’s welcoming, inclusive society and stable, globally respected government and economy make it one of the most attractive choices for foreign direct investment in the world.

Investing in the Future

The Government of Ontario’s commitment to this vital industry is stronger than ever. While there are new challenges in the automotive sector both global and domestic, the province’s government is embracing these challenges as opportunities and creating conditions for Ontario’s auto sector to grow and thrive.

By cutting red tape, removing regulatory roadblocks, and reducing business costs, all levels of government in Canada are working with the auto sector, along with research and educational institutions, to create an economic environment that stimulates growth and innovation. By supporting the technology ecosystem of today, governments are accelerating the development of the technology of tomorrow.

The programs and incentives offered by both provincial and federal governments and the private sector, reflect a solid commitment to the auto industry:

Driving Prosperity: The Future of Ontario’s Automotive Sector, is a government plan to strengthen Ontario’s auto sector.

The Ontario Automotive Modernization Program (O-AMP) is a $10-million program to strengthen and modernize Ontario’s automotive sector over the next three years.

The federal government is investing up to $5 million to create an automotive innovation cluster in Windsor-Essex to update traditional automotive manufacturing with next-generation mobility innovations, smart technologies, and automation.

To expedite auto industry projects, the Ontario government has launched the Job Site Challenge, 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.

Ottawa’s L5 test facility is an integrated test environment for connected and autonomous vehicles (CAVs). The first of its kind in North America, the testing facilities include public and private test tracks, GPS, dedicated short range communications, 4G/LTE and 5G telecommunications, and networking infrastructures.

Providing a competitive advantage to Ontario-based small- and medium sized enterprises, The Autonomous Vehicle Innovation Network (AVIN) is an $85-million program to foster collaboration within the auto industry, the private sector, and academia in the autonomous vehicle industry. With a goal of accelerating growth in transportation technology and infrastructure systems, AVIN provides help in research and development funding, talent development, business and technical support, along with a network of six demonstration facilities across Ontario to help smaller companies connect to the major players in the automotive and tech industries.

These ambitious and innovative plans are only the beginning. With a strong advantage in the ultra-competitive global race to develop autonomous vehicles, Ontario will continue its quest to be home to automakers and suppliers looking to reshape transportation and embrace a new era for the auto industry.

Talent and Workforce Set Ontario Apart

Strong government incentives, state-of-the-art facilities, a dynamic culture of research and development, and easy access to North American markets, gives Ontario an advantage virtually impossible to duplicate.

But what really sets Ontario apart is a highly skilled and productive workforce. With unrivalled experience, knowledge, and expertise, Ontario workers are trained to the highest standards in the industry. It’s the reason Ontario vehicle assembly plants have won 31 J.D. Power & Associates Initial Quality Awards since 1990.

Ensuring employers also have a future workforce trained to the highest standards in automotive design, regulation, safety, education and certification, Ontario is home to 24 colleges and 11 universities that offer automotive research and training programs.

Ontario already has one of the highest educational attainment rates in the world. The province is now focused on increasing the number of postsecondary students graduating in science, technology, engineering, and math by 25 per cent over the next five years. At a goal of 50,000, this will give Ontario the highest number per capita of postsecondary STEM graduates in North America.

Collaborations between automakers and universities are happening all across Ontario:

  • The McMaster Automotive Resource Centre in Hamilton is studying hybrid powertrains with FCA Canada, the cybersecurity of software updates with Toyota, and a cost-benefit analysis of electric mobility with Ford. McMaster University is a leader in materials research and is one of only three universities in the world to have a galvanizing simulator in its state-of-the-art Centre for Automotive Materials and Corrosion.
  • The Fraunhofer Project Centre for Composites Research at Western University is developing automotive materials that are lightweight or have low life-cycle impact, while the University of Waterloo is researching thermo- electric spot welding of galvanized steels.
  • • Queen’s University is collaborating with General Motors in designing and manufacturing lightweight parts and developing thermal regulation in battery systems in cars like the Chevrolet Volt.
  • Students from the University of Toronto won the first AutoDrive Challenge put on by SAE International and General Motors. The three-year autonomous vehicle competition challenges students to develop and demonstrate a fully autonomous vehicle.

Ontario is a leader in Robotics and AI

The province’s auto industry is not only North America’s top vehicle-producing region, it is second only to California in concentration of technology companies.

The 500-mile technology corridor between Windsor and Ottawa alone, has more than 200 companies specializing in autonomous vehicle technology, connectivity, artificial intelligence, robotics, cybersecurity, and quantum computing – a worldwide market expected to be worth more than US$7 trillion by 2050. GM, Ford, Google, Apple and BlackBerry QNX are developing connected and autonomous vehicle technologies in Ontario.

Toronto has one of the highest concentrations of AI startups globally and is home to offices of giants in the field including Uber, Alphabet’s Sidewalk Labs, Nvidia, and Samsung. Toronto was also global automaker Infiniti’s choice to launch its first North American Innovation Lab program.

This fusion of automotive strength and cutting-edge tech innovation gives Ontario an unrivalled advantage in the race to design and build the vehicles of the future.

Ontario Automotive Success Stories

Magna International in the Toronto region, Canada’s largest automotive company, is investing US$300 million over three years in researching and developing in vehicle electrification and autonomous driving.

The company, which had global sales of US$40 billion in 2018, also took a US$200-million equity stake in the ride-hailing business Lyft in 2018, launching a partnership to create an autonomous drive system that will control future Lyft vehicles.

Major automotive supplier ArcelorMittal Dofasco in Hamilton is undergoing a $151-million steel mill modernization to support the steel supply chain crucial to Ontario’s automotive industry. This upgrade directly benefits Ontario’s five major auto assemblers and over 1,200 auto parts suppliers. More than 70 per cent of Canada’s steel production capacity is located in Ontario.

Also in Hamilton, CanmetMATERIALS Lab, is focused on revolutionizing metals and materials fabrication. Working with vehicle, engine and component manufacturers, it is studying innovative solutions in materials to improve fuel efficiency while maintaining safety and performance.

Toyota Motor Manufacturing Canada has established an Innovation Laboratory in Kitchener-Waterloo at one of the largest hubs for the development of Internet of Things (IoT) technology.

Ontario’s automotive story is one of constant innovation and a strategic vision to shape the future of this important sector. A committed and engaged government, combined with a high-tech supercluster, a strong manufacturing base, a highly skilled workforce, and a network of world-class colleges and universities, make Ontario a leader for both today and tomorrow.