A new report recommends the federal government make several policy moves to reflect the current realities of the automotive industry, including rewarding auto companies that are committed to Canada.
The report from the Trillium Network for Advanced Manufacturing at Western University in London notes that the last decade has seen U.S. automakers significantly shrink their Canadian footprint, while Japanese companies have kept production and employment steady.
In 2016, four companies-FCA, General Motors, Honda, and Toyota-regularly assembled more than 400,000 vehicles in Canada annually. By 2025, only Honda and Toyota claimed that distinction, each assembling more vehicles in Canada than Ford, General Motors, and Stellantis combined in 2024 and 2025, according to the report.
With Ottawa set to release its automotive strategy this month, the group is making three policy recommendations:
- Leverage Canada's buying power, found in its large market for passenger vehicles and light-duty trucks (1.9 million units in 2025), to secure further automotive manufacturing investment.
- Reward and incentivize automakers and automotive parts manufacturers that have consistently invested and grown their Canadian manufacturing footprint; and
- Encourage the use of Canadian-made production technologies in vehicle assembly and automotive parts manufacturing facilities to improve productivity and job quality.
Brendan Sweeney, managing director of the Trillium Network, says we should be relying on the track record of companies.
"What did you do the last time around? Did you make good on all the things you were going to do? Because if so, maybe we can help you out a bit more. If you didn't, it's on you to rebuild that trust and do what you said you were going to do before we're really going to be a co-investor," he says.
Sweeney says if a company exceeded expectations, that's evidence they are committed to Canada for the short, medium, and long term, and the government should consider a 'sweetener.'
"If they do look and find that there are certain companies that did not meet their expectations, then, yes, I don't know why we would continue to reward those companies. It doesn't sound like smart policy or strategy to me," he says.
The network says Toyota and Honda also accounted for 62 per cent of assembly plant employment in Canada at the end of 2024, up from 40 per cent in 2015.
U.S.-based automakers have made numerous changes to production in recent years, including some big decisions since U.S. President Donald Trump reversed efforts to increase EV adoption and raised tariffs on imports.
General Motors ended production at its plant in Ingersoll, Ont., last year that was producing its BrightDrop EV delivery van, while last week it cut the third shift at its Oshawa plant that produces pickup trucks.
Stellantis moved production slated for its Brampton plant to the U.S., leaving the future of the plant uncertain, though it also added a third shift at the Windsor Assembly Plant.
Trillium says the frequent idling and underuse of U.S. plants have also pushed down productivity in the sector and often led to prolonged layoffs, while Japan-based automakers are leading the way on productivity.
Sweeney says they also recommend the use of Canadian-made production technologies in vehicle assembly and automotive parts manufacturing facilities to improve productivity and job quality.
"A lot of companies are already doing that. There are not too many welding lines out there that don't have something that says "Centerline" on them, right? We really want to make sure the next generation of technology that goes into Canadian manufacturing facilities is made in Canada," he says.
The Trillium Network says it welcomes the forthcoming automotive strategy and hopes that it reflects the realities of the industry as they are, not as they once were.
With files from the Canadian Press