Ontario Introduces Phase 2 of the Province’s Auto Strategy, Driving Prosperity

On Wednesday, November 17, Premier Doug Ford and Vic Fedeli, the Minister of Economic Development, Job Creation and Trade, unveiled Phase 2 of Driving Prosperity – The Future of Ontario’s Automotive Sector. As a follow-up to Phase 1 (unveiled in February 2019) which focused on the creation of a competitive business climate, innovation, and talent, Phase 2 focuses on accelerating the production and growth in Ontario’s supply chains for electric vehicles (EVs) and battery manufacturing.

Ontario, historically, has been known as a top auto-producing jurisdiction in North America. In 2019, the auto sector contributed $13.9 billion in GDP to the provincial economy and employed 100,000 people in auto assembly and parts manufacturing.

Here is a snapshot of the Phase 2 plan:

Streamlining Innovation:

Innovation and clean growth continue to rapidly influence and change the global auto industry. As a result, the government’s anchor objective for Phase 2 of Driving Prosperity – The Future of Ontario’s Automotive Sector is to maintain and grow Ontario’s auto sector by building a minimum of 400,000 EVs and hybrids by 2030.

To achieve this ambitious target, the government has committed to the following:

• ‍Encouraging Investment through Invest Ontario: Focused on spurring investment in advanced manufacturing and automotive technology, Invest Ontario, a new provincial agency for businesses and investors has a $400-million fund to encourage investments in advanced manufacturing such as EV-related technologies, which will enable growth in this sector.
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• Repositioning Vehicle and Parts Promotion: The government believes Ontario is well positioned to prepare for the car of the future through new automaker mandates for hybrid and battery EVs. Increasing exports of Ontario-made auto parts and innovations and attracting at least one battery assembly plant are listed as top priorities for Phase 2.
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• Leveraging Northern Ontario’s Mineral Wealth: Mindful that Ontario is Canada’s second-largest mineral producer, the Province is ready to create an electric battery supply chain ecosystem anchored with 2 to 3 battery plants. In 2020, Ontario produced $10.5 billion worth of minerals, or 24% of Canada’s total mineral production. The governments’ objective here is to create opportunity for Ontario’s mining sector to be a critical supplier of raw materials within the electric battery and vehicle supply chain.
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• Investing in Ontario Workers: The province will invest in Ontario’s autoworkers by equipping them with the skills they need to secure rewarding, high-paying jobs in the auto sector and broader supply chain.
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Key Takeaways:

Through this announcement, the government is sending a clear signal to the world thatOntario’s automotive industry and manufacturing capabilities are open for business. Ontario is the only place in North America where five major automakers (Ford, General Motors, Honda, Stellantis, and Toyota) build vehicles. Optimism for new partnerships with leading automotive manufacturers will well position the province as an industry leader and while supporting economic growth. Coupled with the mandate letter issued to the Ontario Energy Board and the consultation on time-of-use pricing (that would greatly encourage overnight charging) that Sussex issued an update on last week, the Ontario government is putting the policy structure in place for the move to greater adoption of EVs. From both an economic development and a consumer perspective, the Ontario government clearly expects EVs to play a significant role and is positioning the province accordingly.