New Report Highlights Recent Growth in Canada's Automotive Industry

  • April 25, 2017

A new report by the Automotive Policy Research Centre shows that Canada’s auto industry enjoyed steady growth and stability in employment and vehicle production during the five-year period between 2012 and 2016. The report is available here.

Employment in vehicle assembly and automotive parts manufacturing grew every year to 140,404 in 2016 – an increase of 14,704 people, while annual vehicle production averaged just below 2.4 million units over the past five years, according to the study authored by Brendan Sweeney, project manager of the APRC, which is headquartered at McMaster University in Hamilton, Ont.

Employment grew as the industry shifted from car production to assembly of light-duty trucks and higher value-added vehicles, which require more person hours to assemble.

“If one word were used to sum up the report’s findings, it would be growth,” said Sweeney. “As well as the ongoing economic recovery in Canada and the United States, the auto industry has benefited from recent investment announcements stemming from contract negotiations between Unifor and Ford, General Motors and Fiat Chrysler. Also, the federal and Ontario governments have implemented and refined several public policy tools to support investment in traditional manufacturing and emerging vehicle technologies.”

 Approximately two-thirds of all vehicles produced in Canada include medium-sized SUVs, such as Toyota RAV4, Ford Edge, Honda CR-V, Chevrolet Equinox as well as Dodge Grand Caravan and Chrysler Pacifica minivans. “This proportion is likely to increase in the near future as Toyota replaces Corolla production with the RAV4 at its assembly plant in Cambridge and as GM begins to assemble pickup trucks in Oshawa, Sweeney said.

Over the last five years, Canada’s auto industry became increasingly concentrated in southern Ontario, with Windsor-Essex emerging as the sector’s epicentre, according to the report.

FCA’s minivan plant, which employs more than 6,000 people, in Windsor as well as Ford Oakville and Toyota Cambridge are among the sixth largest manufacturers in Canada by employment, said the report.

“This illustrates the economic importance of the industry,” said Sweeney.

But, if the industry is to continue growing, it must expand its existing footprint, he added. “There’s less room for growth in the existing footprint than there was five years ago. If we’re going to grow, we need to build more plants.”