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Ontario Hatches Auto Rescue Plan

Keith Nuthall, Wards Auto
April 04, 2019

The Ontario government has launched a C$40 million ($29.8 million) policy package designed to grow the Canadian province’s auto sector and stem the hemorrhaging of its jobs and output to Mexico and the southern U.S.

However, while there is support for the plan in the industry, there also is skepticism that the plan will move the needle on preserving auto output in Canada’s most populous province.

Industrial intervention was always going to be a tough call for the new populist Conservative government of Premier Doug Ford, elected to move away from the highly activist industrial policy of its unpopular Liberal predecessor defeated in last June’s provincial poll.

As for parts, a key part of Ontario’s auto industry, Flavio Volpe, president of Canada’s Automotive Parts Manufacturers Assn., calls the Ontario plan “a modest but effective first step.”

He endorses the plan’s 50/50 funding of investments in training, helping the sector “properly skill-up people so we can retain workers who understand how to run 21st-century production systems.”

With Ontario’s parts sector supplying more than 35% of its output to U.S. assemblers and 5%-7% to Mexico, it needs to remain competitive despite some higher built-in costs – especially in energy. “We need to squeeze where we can,” Volpe tells Wards. The best way to do this is ensuring “operators have a higher level of efficiency. We cannot be lazy about this.”

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