Canada’s auto czar takes aim at Ontario labour laws, warns on cost competitiveness

Noah Zivitz, Managing Editor, BNN

A line worker checks vehicles at the General Motors assembly line , The Canadian Press

Canada’s car czar is warning this country needs to re-assess its cost competitiveness in order to attract investments at a time of rampant disruption in the automotive industry.

Ray Tanguay, the federal and Ontarian auto advisor, delivered his call to action in a final report to the two levels of government late Monday.

He flagged Canada’s highly-skilled workforce and advanced R&D capabilities as key selling points; but acknowledged there’s no escaping the burden of what he calls “local processing costs,” including labour, electricity, administrative, cap and trade and currency volatility.

“We have to understand and remove barriers for investors because in order for Canada to win investments we cannot just be competitive – we need to be better than other jurisdictions south of the border,” he wrote in the report, which cited climate change, technological advancement and uncertainty about trade as stirring “unprecedented disruption.”

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Alan Batey, president of North American operations for General Motors, said he agreed with Tanguay’s critique of Canada’s cost competitiveness.

“I would say that assessment is correct, to say that Canada is around the middle of the pack is accurate,” Batey told BNN in an interview from the North American International Auto Show in Detroit.

Batey said he’s “optimistic,” however, as GM’s facility in Oshawa, Ont. has been working to innovate and find cost efficiencies.

Tanguay also took direct aim at recent changes to labour laws in Ontario, with a warning that elected officials might not fully grasp the fallout from the legislative changes that, among other things, pushed up the minimum wage and mandated scheduling flexibility.

“The government of Ontario’s changes to the workplace regulations introduced in 2017 will have a negative impact to our cost competitiveness and our ability to attract investments,” he wrote. “The government needs a better understanding of competition and the impact of its changes.”

Tanguay was appointed to his role as auto advisor in mid-2015 after more than two decades in various roles at Toyota; he was named to the Order of Canada last year for his contributions to automotive sector.

To boost Canada’s standing in the global automotive industry, Tanguay is urging policymakers to focus on bolstering technology, talent and infrastructure networks; while warning the outcome of ongoing NAFTA negotiations will play a big role in determining the future of the industry in Canada.

"We thank Ray for his excellent insights and expertise as we continue our work with industry partners to attract investment, boost innovation and safeguard jobs,” said Ontario Economic Development and Growth Minister Brad Duguid in a press release. “Ray has laid out a roadmap for a prosperous auto sector that aligns with our own vision.”