Canada urged not to copy Mexico’s auto plan
Canadian governments should not “rush” to duplicate Mexico’s one-stop shopping investment agency that has been credited for luring automotive jobs and plants into that country, a new study said Thursday.
Instead, the federal and Ontario governments should set up a pilot project that borrows from the ProMexico model but reflects the “complexities” of the province’s auto sector, said the report by Automotive Policy Research Centre at Hamilton’s McMaster University.
“There’s no question, ProMexico fulfils its mandate very well,” report coauthor Greig Mordue said. “Before Canada or Ontario rush headlong into re-creating the single-window Mexico template, we need to reflect upon what we are ultimately trying to achieve because the dynamics in Canada are quite different from those being experienced in Mexico.”
The report suggests that a pilot project be established in Ontario that focuses on attracting automotive investment. It recommends:
• A more comprehensive website that includes site selection tools and jurisdiction-specific economic data;
• All steps of the investment attraction process should be examined to truncate the process;
• Ontario should continue its efforts to certify specific sites and industrial parks — including those capable of accommodating vehicle assembly plants — as ready for immediate development.
The report comes amid growing pressure on government to reverse a trend that has seen Canada lose out to lower-cost jurisdictions for new capacity investment.
Since the 2008-09 recession, automakers have announced eight new assembly plants in Mexico with investments of almost US$10 billion that will create tens of thousands of jobs. Canada has not landed a single new assembly plant. Meanwhile, Canada’s share of North American production has fallen to 14.2 per cent from a high of 17.6 per cent.
Vehicle production in Mexico has increased from 1.2 million units in 2007 to 3.4 million units in 2015, with some forecasts predicting that more than five million vehicles will be built annually in Mexico by 2020.
Last year, amid growing worries about the future of Canada’s industry, Ottawa and Ontario appointed former Toyota Canada executive Ray Tanguay to the post of auto industry adviser. At last month’s Toronto auto show, Tanguay urged the federal and provincial governments to ensure their industry incentive programs are competitive with the southern U.S. and Mexico.
Tanguay will be in Windsor May 11 to hear suggestions from auto-industry stakeholders as he prepares his final recommendations on how to attract auto investment to Canada.