Is your knowledge of Canada’s automotive industry up to date? The Trillium Network has crunched the numbers and reports on how vehicle production, assembly plant employment, and labour productivity have evolved since 2016. In this episode, the report’s authors, Brendan Sweeney and Greg Keenan, unpack the stats and discuss the driving forces behind them. They conclude with three policy recommendations that we hope to see in the federal government’s forthcoming automotive strategy.

00:00 Introduction and Overview of the Trillium Network’s New Automotive Industry Bulletin

01:34 Reasons Behind the Report's Timing

03:07 Key Findings on Vehicle Production

07:49 Impact on Employment and Productivity

12:58 Federal Automotive Strategy and Recommendations

17:02 Impact of Chinese Auto Imports and Consumer Choices

Read the Trillium Network Data Bulletin

1. The Road Behind Is Not the Road Ahead: What a Decade of Data Tells Us About Canada's Automotive Future https://trilliummfg.ca/data-bulletin/the-road-behind-is-not-the-road-ahead/

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About the Making it in Ontario Podcast

Making it in Ontario is your window into what's next in manufacturing. Ontario’s economy depends on manufacturing, but the latest research reveals concerning trends that could undermine the sector’s strength—if we don’t address them. Join us as we talk to CEOs and other leaders at the forefront of the sector about productivity, strategy, talent markets and career opportunities, and the role of manufacturing in a prosperous and sustainable future.

This podcast is an initiative of the Trillium Network for Advanced Manufacturing. It is produced by Storied Places Media.

Welcome to Making it in Ontario, your window into what's next in

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Ontario's manufacturing sector from the

data driven researchers at the Trillium

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Network for Advanced Manufacturing.

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I'm Michelle Samson.

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Brendan Sweeney: And I'm Brendan Sweeney.

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Michelle Samson: All right, we are

back with another hot off the press

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data bulletin along with both of the

bulletin's authors, which include our

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regular host, Brendan Sweeney, and our now

getting frequent guest host, Greg Keenan.

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So what is this bulletin about, Brendan?

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Brendan Sweeney: This one

is about the evolution and

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changes in Canada's automotive

industry over the past 10 years.

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And what's really funny in some respects

is that it was about 10 years ago that

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Greg and I first really got to know each

other when he was at the Globe and I was

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at McMaster and we had just done a similar

project where we had looked at 10 years

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of automotive industry data in Canada

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some pretty substantial changes then.

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And as you can imagine, when we

take that 10 year look today, some

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very substantial changes, and that's

what we cover in this bulletin.

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We also cover a couple policy concepts,

a couple key strategy points that we

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hope will find its way into the federal

government's automotive strategy that

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could get released at any minute now.

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Michelle Samson: Any minute.

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Brendan Sweeney: Any minute,

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Michelle Samson: Alright, so, why now?

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Why did you write this report now?

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Brendan Sweeney: One reason was

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Namely, we got the full year worth

of production and sales data for

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Canada, for United States, for Mexico.

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And so we had the data and we

just had to write this thing.

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I think it's also, we really want

to make sure that as we talk about

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an automotive strategy, as we move

forward with CUSMA negotiations,

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that we have our reality sewn up.

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That we're not using old information

to negotiate today an agreement

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that's gonna cover the next 10 years.

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Greg, anything to add there?

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Greg Keenan: Yeah.

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I'd say also that it's really top of

mind right now for a lot of people.

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I mean, partly because of the framework

agreement with China that is going

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to allow Chinese electric vehicles

to start coming into the country

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again, although at a limited number.

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And because the auto show in Toronto, the

National Auto Show is happening in a week.

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And because of CUSMA.

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CUSMA is critical to the

future of this industry.

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There's been a lot of complaining

about China and the 49,000

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Chinese electric vehicles that

are gonna be allowed to come in.

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But the real threat to this industry,

from the data and from everything

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else, is Donald Trump and the

abrogation of CUSMA, if that happens.

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In my humble opinion.

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Michelle Samson: Alright, why don't

we dive into what the report found?

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Brendan Sweeney: Sure.

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First subject we cover is vehicle

production, specifically light duty

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vehicle production, passenger cars,

pickup trucks, minivans, SUVs.

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And it shows two things.

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One, we didn't make as many vehicles

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And that's generally been

a trend down from about 2.4

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million in 2016 to 1.2

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million in 2025.

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That's tough.

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That's tough.

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When we get a layer deeper, we show

data for each of the five automakers

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with assembly plants in Canada, and that

really starts to show a different story.

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Because what we see there is that,

you know, at the start of this 10 year

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period, there were four companies,

FCA, which is now Stellantis, General

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Motors, Honda, and Toyota, who could

regularly be expected to make more than

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400,000 vehicles a year each in Canada.

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Today only two companies, Honda

and Toyota, can be regularly

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expected to make more than

400,000 vehicles a year in Canada.

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So that's a real change.

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And just to put it in perspective,

so Toyota made more than

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500,000 in Canada last year.

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They're number one.

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Honda made just more

than 400,000 last year.

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They're number two.

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The other three companies combined

made fewer vehicles, far fewer

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vehicles than Honda alone.

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Michelle Samson: Hmm.

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Brendan Sweeney: So that's a big change.

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Greg, any thoughts there?

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Greg Keenan: Last year the two

Japanese companies produced more than

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75% of the vehicles made in Canada.

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The Canadian units of the

Detroit Three produced 23%.

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Michelle Samson: Yeah, and that's

something that we explored in some

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depth in our interview with David

Adams from Global Automakers of Canada.

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So that's Season 12, Episode 3,

if you want to hear more on that.

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Brendan Sweeney: And I mean, I'll just

say that this is a trend that when I

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was at McMaster, we had identified.

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When Greg was at the Globe and Mail,

he was covering it 10 years ago.

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And it really only seems to be now

that people are looking at each

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other and going, oh, Toyota and

Honda make all the cars in Canada.

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And we go, yeah, we've been

telling you this for 10 years.

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So again, it's pretty

clear what's happened.

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That shift has a real effect on

employment in vehicle assembly plants.

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And so we show some numbers here

around Canadian assembly plant

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employment over the past 10 years.

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And these are plant by plant

employment numbers as reported by the

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companies to the federal government.

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So it doesn't really get

more granular than this.

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And so first off, we see a decrease

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Motors first closed Oshawa, and kind

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people are actively employed in vehicle

assembly plants in Ontario than they

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were six years ago or 10 years ago.

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We only have 2024 numbers for that.

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We don't expect the 2025 numbers

to be much better because we know

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what's happened at Ingersoll and

we know that just last week about

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700 people were laid off in Oshawa.

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That's substantial in and of

itself, but it also means that union

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density in the industry is much,

much lower than it was in the past.

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We've got it calculated at around 33%.

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You know, and it also follows that

the Japan based automakers, they

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now employ about, I think we've

got 58, 59, 60% of all vehicle

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assembly employees in the province.

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And it's almost like an exact

inversion of what that mix of employees

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between US based and Japan based

automakers looked like 10 years ago.

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So that's another fundamental change

that follows closely, that flip in who's

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actually making vehicles in Canada.

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Michelle Samson: So the rising

proportion of workers in Japan

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based automaker assembly plants

had a surprising impact on Canada's

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labor productivity as well, right?

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Brendan Sweeney: It's not so much the

rising number of people, or really

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a very consistent number of people

working in Japan based automakers.

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What we kind of say is that, well,

productivity at Toyota and Honda has

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been pretty stable as far as we can tell,

and maybe it's actually increased a bit

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because those plants are doing a greater

proportion of higher value added vehicles,

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hybrid vehicles, luxury vehicles.

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The real problem is that, frankly,

vehicle assembly plant employment has

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gone down considerably over the past

10 years, and again over the past

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six years, from close to like $120

an hour to less than $70 an hour.

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And I can tell you why.

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Toyota and Honda are not the reason.

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I mean, they're the reason

there's any labor productivity

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in this industry right now.

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The problem is that empty factories,

idle factories, factories operating below

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capacity are not good for productivity.

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This is a time where we are talking about

the need for productivity growth, right?

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And I think it's important sometimes to

step back and go, okay, well that's nice

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that we need productivity growth, I get

it, but why isn't productivity growing?

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And I think we're assuming, well,

why isn't it growing in individual

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workplaces, in individual companies?

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Well, here's an example of a place where

it's actually going way, way down because

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companies just are either under investing.

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Or are just not doing anything with the

assets that they have on the ground.

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So I think that's gotta be a

real priority moving forward.

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You know, before we talk about

integrating AI, before we talk about

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this, before we talk about that,

get your plants up and running or

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hand them off to someone who will.

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Greg Keenan: And to be fair, the main

reason these plants are idle is because

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at least three of them, Brampton

Stellantis, Ford Oakville, GM CAMI

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were all preparing to switch over to

battery electric vehicles, and they

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all canceled or put those projects on

hold after the Trump administration

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changed the rules in the United

States on the sale of battery electric

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vehicles and said, we don't want them.

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And you've seen this in the moves that

the Detroit Three have taken, this year

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in particular, and that the billions and

billions of dollars in write downs on

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the money they spent investing in these

projects because the US administration

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is determined to keep the country driving

internal combustion engine vehicles

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and not battery electric vehicles.

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Those are the idle plants: Brampton,

which was supposed to make EVs, Ford

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Oakville, which was going to make

EVs, but is now switching to super

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heavy duty pickups that are gonna be

internal combustion engine powered.

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And CAMI, which was making BrightDrop

electric delivery vans for GM, but

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GM canceled that project last year.

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Brendan Sweeney: Mm-hmm.

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So we identify what's changed and

that kind of gets us from the past

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to the present in the bulletin.

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And we also understand that in

the present, like maybe this week

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or next week, we're gonna see

a federal automotive strategy.

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We certainly hope that we're just aligned

on everything and that the things that

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we suggest, the things we recommend

are already in there and it's great.

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And then we can look at

each other and go, hmm.

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If they're not in there, we hope that

someone will pay attention and that,

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you know, over time we will see these.

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There's three recommendations, three

very broad recommendations that we make.

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The first is that we

leverage Canada's market.

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We leverage vehicle sales of

passenger cars, of light duty

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trucks, which together is about 1.9

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million units, the eighth largest

market for vehicles in the world that

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we leverage that to secure further

automotive investment down the road,

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whether that's assembly investments or

whether that's investments in electric

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vehicle batteries or something else.

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Those are probably the two where we start.

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But this is a huge market and we really

haven't done much to leverage it for, you

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know, the better part of 40 years now.

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Greg Keenan: One of the ways to do

that is out there as an idea, and we've

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talked about it, is trying to find

some way to make sure that companies

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that sell in Canada, build in Canada.

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And if they don't build in Canada, then

the companies that do build in Canada

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get a greater advantage in some way.

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That's one of the elements

of that recommendation.

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Brendan Sweeney: Yeah.

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And that can look like a whole

bunch of different things, whether

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it's duty remissions, whether it's

production credits, but I think

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it's really time to focus on this.

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And, you know, you wanna balance

consumer choice with the economy, right?

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With what's good for the economy.

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And this is a time to do it.

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The second recommendation that we

make is that we come up with some way,

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and it's related to the first, but to

reward or to incentivize automakers,

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automotive parts manufacturers, or

technology suppliers that consistently

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invest, that have consistently

grown their Canadian footprint.

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Not those that kind of keep walking

it back and asking for things.

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In the report, I think we identify

five specific companies that have

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done this over the past 10 years.

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There's more than five, but

we identify Toyota and Honda.

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Linamar and Multimatic, two

Canadian parts makers, one based

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in Guelph, one based in York Region

that have grown their footprint.

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And PowerCo who have not yet really

made a battery in Canada, but they are

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pouring concrete, they're getting ready

to build the plant and they have hired,

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I think they're into a couple hundred

people now, but we know they've hired

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their first cohort of production staff.

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So that's really exciting and that, you

know, it's probably a small cohort right

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now, but those people are gonna get

to go on trips to Germany and to Spain

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and to learn how batteries are made.

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So that's really exciting.

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But those are examples of five companies

that have grown their footprint,

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and to us those are companies that

really look like they want to be here.

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And then finally, this goes back

to a point we made in our Canadian

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car company report and in that

podcast about production technology.

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About automation and AI and tooling

and you know, the idea that maybe

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the Canadian car company, maybe the

whole play there is not the car.

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Maybe it is, maybe it's not.

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Maybe it's the factory, right?

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Maybe it's the factory of the future.

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And this is a really great opportunity

to insist, to say listen, if we're

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gonna invest in the automotive

industry in Canada moving forward,

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all those investments should feature

bleeding edge, leading edge, cutting

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edge production technologies.

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And those production technologies,

wherever possible and whenever

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possible, should come from Canada.

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Last thing though, the Chinese car thing.

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Whether they're gonna be Teslas or

whether they're gonna be BYDs, we don't

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see a lot of immediate positives for

the automotive industry in Canada there,

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but the end of the day, it is up to the

consumer in Canada to make the choice.

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Do you wanna buy a vehicle that

was made in Shanghai, and that is

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going to simultaneously support the

Communist Party of China, and Elon

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Musk, and by extension Elon's friends?

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Do you wanna do that, or are you going

to think about buying a vehicle that's

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either made in Canada or that's made

by a company that invests in Canada?

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You know, I think about it this way.

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You go to the grocery store

and you use a shopping cart.

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And yeah, you can leave it in the

middle of the parking lot and just

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drive away and not put it away.

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Or you can put it back in

the cart carousel, right?

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So you can do what's right

or you can do what's easy.

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And I think Canadian consumers

can make that choice.

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And we're gonna rely on

them to make that choice.

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And maybe a bit of education

about the industry and about where

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your car actually comes from,

and what that means would help.

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Greg Keenan: They're certainly doing

it when it comes to the grocery store.

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I mean, the evidence is pretty strong

and I know it myself that if I see

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something made in the United States, I

say, well, can I get cauliflower grown

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in Mexico instead of the United States?

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We've talked about it on the podcast, we

suggested that it might be an idea for

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the federal government to insist on a

very large sticker on vehicles made in

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Canada that says, "Assembled in Canada."

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I mean, if you try to find it now on

a vehicle, it's really hard to find.

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I mean, it's there, but it's buried.

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It's not on the sticker price.

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You know, where you see the price and

all the options on that driver's side

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window when you're in a car lot, big

sticker on there, Assembled in Canada.

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Canada underlined.

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How much is that gonna cost anybody to do?

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And there's the education

that Brendan talked about.

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Brendan Sweeney: Yeah, we could

source the stickers locally.

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Greg Keenan: Yeah, I can think

of a company that might do it.

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And you can walk around a car

lot and say, okay, that one's

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assembled in Canada, that one isn't.

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They both meet my needs.

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I'll buy this one.

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Michelle Samson: Lots of food for thought

for consumers, federal policy makers.

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I think we can leave it there.

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Thanks so much Brendan and Greg.

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Greg Keenan: Thanks Michelle.

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Michelle Samson: New episodes

of this podcast are coming soon.

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Follow us on your favorite podcast

platform to be notified when it drops.

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Making it in Ontario is an

initiative of the Trillium Network

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for Advanced Manufacturing.

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It is produced by Storied Places Media.