Beleaguered auto industry needs a plan, not a vision

Canada is jumping into the electric vehicle market with both feet, and that sure seems like it will be a great thing for labour, investment and the environment.

But that will only be the case if it comes with some solid, strategic thinking and a financial commitment for government, the private sector and labour to follow through.

Ford Motor Co. and its main union in Canada, Unifor, announced on Tuesday they have a tentative three-year agreement that includes a $2-billion investment to mass produce electric vehicles and their batteries in Canada — a first for us.

The federal and provincial governments are working behind the scenes and sources say they aim to come up with about 30 per cent of that funding — well over $500 million. That’s higher than the traditional 20 per cent that comes from governments in deals like this, and it’s an aggressive decision by them to place their bets on electric vehicle manufacturing.

“I think this is a quantum shift,” said a jubilant Unifor president Jerry Dias after negotiating late into the night to square away details with Ford. “We have been talking for decades about having a national auto strategy in this country, and for some reason, we can never seem to get everybody in the room at the same time.

“Over the last several months, those walls have really been torn down.”

For Dias, obviously the top goal is saving his workers’ jobs. Unifor represents 6,300 Ford workers in Canada, 3,400 of whom are at the plant in Oakville. The investment to retool the plant and set up shop to produce five electric vehicles and their batteries will save about 3,000 of those jobs, Dias said Tuesday. The other workers will retire.

Dias’s top goal has been met, and now he’ll take the case to the other Big Three automakers. The Canadian auto industry now has a chance to save itself, and pivot toward a growing global market of electric vehicles, replacing traditional production over the coming years.

But mere replacement is not the economic growth the federal government has in mind.

Its goals go much further than that. It sees the Ford investment as the first step toward rebuilding a major part of Ontario’s economy, where the auto sector once flourished but now struggles.

It envisions other big automakers quickly following Ford’s lead and switching to EV production, and it’s ready to come to the table to support those investments too.

It sees mining companies ramping up production of nickel and metals required to make the batteries that run electric vehicles, spreading the growth around the country. It sees the auto-parts sector embracing EV technology, making it better and becoming more and more competitive around the world.

Research and development, investment and jobs galore, and soon.

“With Canada’s natural resources and skilled workforce providing a competitive advantage, we absolutely must support the development of the next generation of battery supply chains, right here in Canada,” Innovation Minister Navdeep Bains wrote last week in Policy Options magazine.

On the environment, the government is equally ambitious. Canadians want to buy electric vehicles to help reduce emissions, but they can’t find enough EV cars to meet demand. Canadian production can help on that front - as long as those new cars have the plug-in infrastructure across the country to help them drive long distances.

Canada’s auto sector could become part of the global solution rather than the problem with emissions. That’s the vision.

“Canada now has an opportunity to invest in electrification and drive a green recovery to help achieve our climate change goals,” Bains said.

It’s ambitious, but it needs considerably more detail and money to become a real plan, and there’s certainly no guarantee of success.

Richard Florizone, who heads the International Institute for Sustainable Development, is from Saskatchewan, and he explains it this way: Canada is good at producing wheat, but it doesn’t mean we export lots of delicious bread.

“Just because we have natural resources doesn’t mean we have battery potential,” he said.

Florizone was part of a green recovery task force that has recommended the federal government plow public money into electric vehicle production to get in sync with the rest of the world and its demand for low-carbon production.

Other countries are piling into the EV manufacturing sector, too, and if Canada wants to be competitive and reap the emissions benefits by producing EVs at home for domestic buyers and export alike, government needs to be a full player, he says.

The Ontario government’s proportion of the financing for the Ford deal is still up for negotiation. Premier Doug Ford (no relation) has signalled his government will be a full participant.

If the bets the federal government is placing right now in the Oakville plant are going to manifest in sustainable growth for all, Ottawa needs not just Ontario but industry, labour and a lot of good ideas to have a hope of making the vision happen.

Government insiders are convinced the ideas and money will come, and fast. It’s an ambitious bet.