Toyota facilities in Ontario to get $1.4B upgrade

Toyota Motor Corp. announced Friday that it is investing $1.4 billion to upgrade two of its manufacturing plants in Ontario, a move that comes after years of auto industry investment shifting south of the border and amid uncertainty over NAFTA negotiations.

The Japanese automaker said it will spend $1.4 billion to upgrade its facilities in Cambridge and Woodstock, where its RAV4 sport utility vehicle is produced, turning the plants into its North American hub for RAV4 production. The federal and Ontario governments will each contribute $110 million toward the upgrade of the plant, which they say will help create 450 new jobs and support 1,000 new co-op placements.

Toyota also said it will also commit $200 million for research and development in Canada over the next 10 years.

The investment comes as auto manufacturers in North America adjust their production mix to meet unprecedented demand for SUVs and light trucks. Last month, Ford Motor Co. announced it would discontinue almost all of its car models in North America within two years, shifting its focus to the increasingly popular SUVs and light trucks.

It also sends a signal of confidence in the ongoing NAFTA negotiations, said Flavio Volpe, the president of the Auto Parts Manufacturers’ Association. Recently, pressure has been ramping up on Ottawa to conclude NAFTA talks as trade uncertainty lingers.

David Worts, the executive director of the Japan Automobile Manufacturers Association of Canada, hailed the investment as an endorsement of the competitiveness of Canadian production.

At the same time, while the investment was welcomed across the Canadian auto industry, some representatives who have been critical of the Comprehensive and Progressive Agreement for TransPacific Partnership said the money does little to alleviate the concerns they have about the trade deal, which still needs to be formally ratified.

Volpe said Toyota’s investment, while signalling a vote of confidence in Ontario’s manufacturing capabilities, does not address concerns about the CPTPP deal, including that lower automotive rules of origin will make it easier for countries to import non-TPP sourced vehicles into Canada, and that the deal doesn’t provide increased access to the Japanese market.

“(Our position is) unaffected by this. These RAV4s are going to be made for Canadians, Mexicans and Americans, not exported to Japan ... If more than 1,000 made their way to Japan, I’d be surprised,” Volpe said.

Jerry Dias, the president of Unifor which represents more than 23,000 Canadian autoworkers, echoed Volpe’s sentiments and said it was a welcome announcement, but he still has concerns about CPTPP.

“This is a way of, in my opinion, softening the blow of CPTPP,” Dias said.