The Globe and Mail reports in its Tuesday edition that Canada's auto industry is facing significant challenges, though it is not collapsing just yet. The Globe's guest columnist Greig Mordue writes that the industry's endurance stems from past industrial policy measures. It is time to revisit that playbook.
In the early 1960s, Canada's auto industry was also under pressure. In the early 1980s vehicle sales plummeted and employment in the sector collapsed. Meanwhile, Japanese automakers flooded the market. Modest government grants were issued to encourage Japanese production in Canada. Today Toyota and Honda produce about 900,000 vehicles annually in Canada, making up about three-quarters of total production, while the Detroit Three account for about a quarter. Today, Canada's policy-makers face new challenges. While the U.S. market remains large and nearby, the U.S. administration's insular approach is making it difficult for Canada's assembly plants to secure production mandates. Canada's automotive industry faces a critical decision. Delaying action until 2029 risks losing potential Chinese investments, especially if a U.S.-China trade agreement shifts Chinese interests toward the U.S., leaving Canada behind.
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