Canada’s auto industry is midway through a decade of profound transformation, marked by falling vehicle production, the rise of Japanese automakers and a renewed policy push toward electrification. A federal decision to scrap the EV mandate adds fresh uncertainty as global competition intensifies.
BNN Bloomberg spoke with Charlotte Yates, president of the Automotive Policy Research Centre and professor of political science, about Canada’s declining assembly footprint, the growing dominance of Toyota and Honda, and why securing electric-vehicle investment remains critical to the sector’s long-term viability.
Key Takeaways
- Canada’s annual vehicle production has dropped from roughly 2.4 million units a decade ago to about 1.3 million today, reflecting a sustained contraction in assembly.
- Toyota and Honda now anchor Canadian auto manufacturing, while production by Detroit Three automakers has declined and some plants remain idle.
- Weak productivity data is partly the result of underused factories rather than worker performance.
- Canada’s auto parts sector remains comparatively strong, led by globally competitive Canadian firms supplying both domestic plants and U.S. assembly lines.
- Long-term competitiveness depends on attracting electric-vehicle assembly and battery investment, with projects such as Volkswagen’s St. Thomas battery plant central to that strategy.
Read the full transcript below:
ROGER: We are halfway through a decade of major change in Canada’s auto industry, driven by electrification, shifting government priorities and new global players. The federal decision to scrap the EV mandate marks another pivotal shift. To break down what it means for the sector, we’re joined by longtime industry expert Charlotte Yates, president of the Automotive Policy Research Centre and professor of political science. Thanks very much for joining us today.
CHARLOTTE: Nice to meet you.
ROGER: What do we have from the 10 years of data? What does it tell you about the industry here in Canada?
CHARLOTTE: The auto industry in Canada has really been struggling over the last 10 years. A little more than 10 years ago, we were producing 2.4 million vehicles. Today, we’re producing more like 1.3 million. So there has been a significant decline in production.
This was certainly aggravated by COVID and by a number of decisions made by the auto companies, in particular the Detroit Three — Stellantis, Ford and GM — which operate in Canada. So we’ve seen a decline in production.
We’ve also seen a very robust auto parts sub-sector, driven by strong Canadian-owned parts makers such as Linamar, Magna and Martinrea, which have been able to produce parts efficiently and ship them to the United States. So it’s been challenging for assembly, but stronger for parts. In the long term, however, there is risk for the industry in Canada.
ROGER: Just in general, what did the Detroit Three do? Did they move production south of the border? Did they move it outside North America? Or did sales simply drop?
CHARLOTTE: If you look at the whole picture, the biggest producers in Canada now are Toyota and Honda, and they have been for a number of years. While the Detroit Three have shrunk their profile and the number of vehicles they build in Canada, Toyota and Honda have maintained and, in fact, expanded production over the last decade. They are really at the heart of the Canadian auto industry right now.
GM, Stellantis and Ford each have slightly different stories. Since Donald Trump was elected, we have seen production shift from Canada to the United States, which has been a blow for Canada. But it also reflects longer-term trends.
Take Stellantis, for example. The company has faced financial challenges and recently sold its share in a battery plant project in Windsor. It has consolidated production in the United States and has an idle plant in Canada. It would be difficult to expect a significant increase in its Canadian production in the near or medium term.
GM has also reduced its footprint, and Ford is retooling its major Canadian plant. All of this raises questions about the short-, medium- and long-term plans of these companies, as well as Toyota and Honda, and about how government incentives shape industry decisions.
You mentioned EVs. Electric vehicles are central to this discussion. Right now, EVs are a long-term project for Canada. We do not produce electric vehicles at scale. GM had a plant in Ingersoll that was shut down before it was fully ramped up, and it was focused on a niche commercial vehicle.
Governments have provided incentives for EVs for good reason. Despite the current slowdown in consumer demand, EVs represent the future. If Canada wants to maintain an internationally competitive auto industry — whether with the Detroit Three or with other players such as Volkswagen — it must have the capacity to build EVs.
ROGER: Are we there? Do we have an industry capable of that? We’re almost out of time, but do we have the capability? Are we ready, or are we too late?
CHARLOTTE: I don’t think we’re too late. Volkswagen has announced it could take advantage of federal incentives for EV purchases and duty relief if it builds in Canada. If it establishes an assembly plant here, it would likely align it with its battery plant in St. Thomas.
That could create a production cluster designed for the Canadian market and, eventually, international markets, potentially including the United States. It would be focused on EVs.
EVs will continue to define the future of the industry, notwithstanding decisions by Ford, Stellantis and GM to scale back some of their EV investments.
ROGER: Professor, I apologize — we have to wrap it up there. Thank you very much for joining us.
CHARLOTTE: Thank you very much.
ROGER: Charlotte Yates is president of the Automotive Policy Research Centre.
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This BNN Bloomberg summary and transcript of the Feb. 11, 2026 interview with Charlotte Yates are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
