Ontario’s automotive industry is in a better place today than it has been in years
And it has been decades since we’ve been able to say that
The investment announced by Stellantis and LG today – Ontario’s biggest automotive-related investment yet – are important for three reasons. First, it provides the province and the country with what will ultimately be our first operational full scale battery manufacturing facility. Second, it potentially bodes well for Stellantis’s operations elsewhere in Ontario. Third, it reaffirms the importance of Windsor-Essex, and southern Ontario more generally, as part of the most dense and integrated international automotive and autotech ecosystem in the world. It also maintains the status of Ontario as a critical partner in this once-in-a-lifetime transformation in mobility.
Those from government, industry, labour, and elsewhere in the automotive ecosystem who worked to secure this investment should be commended.
This investment may not be the last that we hear about in 2022, although this is just our guess. Fingers crossed.
This brings us to the main point: there is still work to be done.
When it comes to winning investments in the automotive industry, there is always more work to do. Among the most important areas to address are the workforce, industrial land, integrating mineral resources, and supporting suppliers during the transition to EVs. The good news is that much of this work is already well under way.
Ontario’s workforce has long been heralded as an important competitive advantage for the province’s automotive industry. While this is true, we should not ignore the challenges associated with an ageing workforce and historically-tight labour markets. That said, these investments present an opportunity to engage and develop a new generation of talent, implement innovative training programs, and address gender diversity gaps that have long existed within automotive manufacturing. The last point is something some automakers, such as Honda of Canada Mfg. and General Motors of Canada, are already doing.
The availability of industrial land in Ontario has received considerable media attention recently. While this investment does not belie the fact that serviced industrial land is at a premium in Ontario, it does show that government and private sector partners are able to find suitable locations for transformational investments when they are required to do so. But we remain of the opinion that stakeholders should take care to ensure that prime parcels of industrial land remain available to manufacturers first and foremost. It would be a shame to miss out on a generational investment because the land went instead to house another distribution centre full of goods manufactured outside of Ontario.
Integrating Ontario’s abundant mineral resources into the EV supply chain remains a priority. The Government of Ontario’s recently-announced Critical Minerals Strategy is an important step towards building tangible links between mining and next generation vehicles. Such a strategy is vital to bringing the prosperity associated with the automotive industry to Indigenous and more northerly communities. Balancing environmental and social considerations with the need to develop these linkages in a timely manner will be important moving forward.
Finally, supporting Ontario parts and component manufacturers during this transition will be essential to the overall well-being of the industry. More than 10,000 Ontarians are currently employed in facilities that manufacture engine, transmission, and exhaust system components. Many of these components may become obsolete as the result of the transition to EVs. Having a plan to support these companies and their employees to ensure that they can successfully transition to manufacturing components for EVs and other next generation vehicles is a necessary part of any automotive strategy.
Stay tuned for more information from the Trillium Network and our partners regarding the future of the automotive industry in Ontario in the coming months. For example, the future of Ontario’s EV industry will be the subject of an expert panel convened by the Trillium Network at the upcoming EDCO conference in Toronto!
If you would like to know more about the Trillium Network and Ontario’s automotive industry please reach out to us at your convenience (firstname.lastname@example.org).