Federal and provincial governments’ spending shows they recognize the future of automotive is electric

Recent budgets and other announcements lay bare a lot of investment in the electric-vehicle business

By Michael Eatson Wheels.ca

Jun 6, 2022 3 min. read

Article was updated a month ago

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In the last two years, the federal and Ontario governments have been on an investment spending spree to help the automotive industry transition from internal combustion engines to electric vehicles.

These investments are aimed at ensuring the viability of the auto manufacturing sector in Canada and are also aligned with the feds’ green initiative, which mandates in part that all new light-duty car and passenger truck sales emit zero-emissions by 2035.

In 2020, when Ford announced it would build fully battery electric vehicles, the federal and Ontario governments each contributed $295 million to help Ford upgrade its assembly plant in Oakville to begin EV production.

In 2021, the federal government committed $5 million toward the Automotive Parts Manufacturers’ Association in support of Project Arrow, the automotive industry’s first Canadian-made, zero-emission concept vehicle.

This investment kicked off an electric vehicle supply chain in Canada, increasing Canada’s domestic electric vehicle development capacity in everything from electric powertrains and CAV systems to battery production.

Also in 2021, the federal government and Quebec government made a joint $100 million investment in Lion Electric, a Montreal-area company that makes electric school buses and trucks. The company will use the funds to build a battery pack assembly plant in Saint-Jérôme, Que.

More recently, in March, the federal and Ontario governments pledged $131.6 million each in Honda’s manufacturing plant in Alliston. This joint investment will allow Honda to build the 2023 CR-V and CR-V Hybrid vehicles.

In April, the federal and Ontario governments announced that they would invest $518 million toward General Motors of Canada’s $2.3-billion-dollar upgrade to its Oshawa and Ingersoll plants, along with R&D facilities in the province.

These upgrades will pave the way for GM’s first EV production line in Ontario in Ingersoll and the continuation of vehicle production in Oshawa.

In March, Stellantis and LG Energy Solution announced a joint $5 billion investment to build Canada’s first electric vehicle battery cell manufacturing plant, located in Windsor. (Federal and Ontario government money will be invested in this project, but the amount has not yet been disclosed for commercial security reasons.)

This news was followed by the announcement of a $3.6 billion investment to upgrade the assembly lines at Stellantis' plants in Windsor and Brampton so they can make electric cars. The federal government will contribute $529 million, and Ontario will contribute $513 million toward this upgrade.

In the recent federal budget, an investment of at least $2 billion was earmarked for the production and processing of critical minerals needed for the EV battery supply chain.

In March, the Ontario government announced a five-year critical minerals strategy aimed at better connecting mines in the north to the manufacturing sector in the south, specifically to Ontario-based electric vehicle and battery manufacturers.

A large portion of this new investment – valued at $24 million – will go toward positioning the province as a global leader in supplying critical minerals, such as nickel, cobalt, lithium and rare earth elements.

In 2020, Ontario produced $3.5 billion worth of critical minerals with a mining sector that employed about 75,000 people, and auto assembly and parts manufacturing accounts for 100,000 direct jobs and thousands of spinoff jobs across the province.

Vic Fedeli, Ontario’s Minister of Economic Development, Job Creation and Trade, said it best in an April 2022 news release. “We’re making sure our innovators, entrepreneurs, and small and medium-sized enterprises in every region of the province have the capital and support they need to bring Ontario-made EV and connected and autonomous vehicle (CAV) solutions to the world.”

As these investments indicate, the federal and provincial governments and the auto industry are clearly banking on an electric future, a future which includes supporting the nearly 100,000 Ontario auto jobs, a future that aligns with the federal government’s mandate to reduce emissions and fight climate change. 

Michael Eatson is president of the Trillium Automobile Dealers Association and is president of Peterborough Volkswagen. This column represents the views and values of the TADA. Write to president@tada.ca or go to tada.ca. For information about automotive trends and careers, visit carsandjobs.com.