The Minister of Industry was in Guelph, Ont. on Friday to address the government’s strategy for transforming Canada’s auto sector.
Mélanie Joly met employees at Linamar and discussed the government’s goal of making the auto industry less reliant on gas-powered vehicles and the U.S.
The visit comes one day after Prime Minister Mark Carney revealed new measures to boost auto manufacturing.
“We want to make sure that we build cars in Canada, build them for North America, but also for the world. And the other objective is we want to embrace progress,” Joly said on Friday.
The plan includes:
- Creating a five-year electric vehicle (EV) rebate program with up to $5,000 for full EVs and up to $2,500 for plug-in hybrids
- Allocating $3 billion from the Strategic Response Fund and up to $100 million from the Regional Tariff Initiative to “help the auto industry adapt, grow and diversify to new markets”
- Reducing corporate tax rates for zero-emission technology manufacturers to encourage investment in clean tech and EVs
- Dropping the EV mandate
- Creating stronger greenhouse gas emission standards (with the goal of achieving 75 per cent EV sales by 2035 and 90 per cent EV sales by 2040)
- Enhancing Canada’s EV charging network with a $1.5 billion investment from the Canada Infrastructure Bank’s Charging and Hydrogen Refueling Infrastructure Initiative
Carney also said the plan would reward companies that produce vehicles and invest in Canada’s auto manufacturing sector, noting its recent memorandum of understanding with Korea and strategic EV partnership with China.
“It is, first and foremost, a Buy Canada policy,” Joly said in an interview with CTV’s Vassy Kapelos on Thursday. “We also believe that the future of the industry is EV. Why? By 2035, we know that 40 per cent of… the cars sold in the world will be EVs. We know that.”
North America, she continued, has been slower to adopt change.
“While we can’t control what’s going on in Washington, we need to make sure that we embrace progress,” Joly said. “It is our promise to auto workers that they will continue to have great jobs in the future.”
The minister’s visit in Guelph also coincided with Stellantis’ announcement that it was selling off its 49 per cent equity stake of NextStar Energy and LG Energy Solution would take over ownership of the Windsor-based EV battery manufacturing facility.
It underscores the volatility of the North American electric vehicle market.
Stellantis is expecting a $26 billion USD hit for pulling back from its electrification push after over-estimating the demand for EVs.
When speaking with reporters on Friday, Joly downplayed the move.
“I think it’s really good news. I think it’s very welcomed, and it shows LG is here for the long run,” she said.
She also spoke about why Linamar made sense as a backdrop to highlight the new measures.
“What I would like to do is not only expand the business plan of Linamar,” said Joly. “Linamar has great knowledge from around the world of the different auto trends so I want to see what we can do to build more Canadian-made cars.”
But the government’s effort to go all-in on EV’s is concerning for used-car dealerships like Quality Car Sales in Kitchener.
“In southwestern Ontario, electric cars are definitely not the future,” said Dillon Meyer, business manager at Quality Car Sales.
Meyer said he believes hybrid vehicles are the future in this part of the province, not EVs.
He does not believe we’re set up for it given the extreme cold temperatures and considering we’re not on a grid system that allows for charging large numbers of EVs
Not to mention, EVs have a reduced range compared to gas cars.
“Nobody is that interested in a used electric vehicle,” said Meyer. “All of those electric cars, as they get older and older they just become worthless, essentially, because the range is so small you can’t drive it far enough.”
Meyer added the depreciation on an electric car is higher because parts availability becomes a problem.
He said manufacturers don’t want to make batteries for older cars so the re-sale value plummets.
It leaves used car dealerships in limbo when it comes to how they fit into the long-term plan of this electric vehicle push.
