Canadian government extends Automotive Innovation Fund investment
Canadian Prime Minister Stephen Harper announced the Automotive Innovation Fund on Friday. (Photo Credit: CC BY-SA/Saibo/Wikipedia)
The Canadian auto industry will receive a major cash infusion, thanks to Prime Minister Stephen Harper’s decision to extend the Automotive Innovation Fund by five years. Automotive News reports that Canada will invest $253.69 million in the nation’s automotive industry. In Ottawa and beyond, this should encourage additional private sector investment and promote a variety of manufacturing jobs across Canada.
Harper extends Automotive Innovation Fund
The Automotive Innovation Fund, which began in 2008 and serves as an arm through which the Canadian government can support research and development within the nation’s auto industry.
“Our government remains focused on creating jobs, growth and long-term prosperity and to keeping Canada’s automotive manufacturing sector globally competitive and innovative,” Harper said before a gathering of the automotive press at a Ford assembly plant in Oakville, Ontario.
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How companies can take advantage of the Automotive Innovation Fund
Canadian automotive companies that make auto investors of $76 million or more are eligible for aid from the Automotive Innovation Fund. So far, $1.62 billion has reportedly been invested into the automotive industry by the fund, for automakers ranging from Ford of Canada and Linamar Corp. to Toyota of Canada and Magna International.
Sizable government subsidies will continue to come, in spite of the fact that GM has moved production of the Chevy Camaro from Oshawa, Ontario, to Lansing, Mich.
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As GM goes…
Canadian Auto Workers president Ken Lewenza welcomed Harper’s announcement of the Automotive Innovation Fund extension, but noted that the nation would have to do a great deal to match what incentives the U.S. and other countries are offering.
“I’m very grateful for the fact that they established the fund, but I still think we have to take a look at a longer term approach to how do we sustain it long term, because what we know is investment comes and goes,” Lewenza told said.
In recent years, the value of the Canadian dollar, manufacturing costs and other factors have caused the Canadian auto industry to fall out of the world’s top 10. The total number of industry jobs dropped by a third from 1999 to 2009. With the departure of GM, Canadian Industry Minister Christian Paradis expressed concern that Canada would have to pull away from its GM investments. This is in spite of a $10.1 billion bail out investment in GM in 2009. Yet Harper was not deterred.
“We are not bound by what the United States decides,” Harper said. “We’ll sell in a way that attempts to maximize the value for the Canadian taxpayer.”