Canada needs to start thinking about an auto sector without U.S. automakers

[BeaverFever]

Canada needs to start thinking about an auto sector without U.S. automakers

ADAM RADWANSKI

POLICY COLUMNIST AND FEATURE WRITER

PUBLISHED OCTOBER 18, 2025

Canada is stuck in an increasingly abusive relationship with the three traditional North American automakers.

And what governments here need to start asking themselves is whether – and if so, how – they can get out of it and maintain a robust domestic auto industry.

It’s a question that should be top of mind following this week’s announcement by Stellantis NV that it’s moving Jeep Compass productionfrom Brampton, Ont., to Illinois – deference to U.S. President Donald Trumpthat prompted a furious reaction from Canadian politicians.

 

But it’s been at least two decades in the making – a period during which General Motors Co., Ford Motor Co. and Stellantis (the European parent company of erstwhile American giant Chrysler) have shrunk operations here, while perpetually holding Canadian policy makers hostage with demands for public funds.

 

U.S. automakers on track to pay $10-billion in tariffs by end of October

In 2007, per data compiled by the Trillium Network for Advanced Manufacturing, the three automakers assembled nearly 1.7 million vehicles in Canada – down from a 1990s peak. That was the last year before the recession during which Ottawa and Ontario (where the industry is based) committed nearly $14-billion to bailing out GM and Chrysler, including billions in written-off loans. 

Those governments have since committed billions more in subsidies that the companies demanded not just for new facilities, but to keep existing ones open. 

In return, the annual production total is down to around 600,000 cars, in a good year. Some long-standing facilities have been shuttered or indefinitely suspended; others, including the GM Oshawa plant once one of the industry’s pillars, have been dramatically scaled back, putting thousands out of work.

Along the way, the companies’ value to Canada relative to other automakers has eroded. In 2007, they accounted for about 70 per cent of Canadian-made vehicles, while Japan’s Toyota Motor Corp. and Honda Motor Co. made up the rest. Now those percentages have almost completely flipped. 

 

Honda CR-Vs and Civics leave the company's plant in Alliston, Ont.Fred Lum/The Globe and Mail

And yet, while the two Japanese giants have generally been better corporate citizens – maintaining stable and supportive presences in towns where they’ve put down roots, and being less cutthroat in demanding subsidies (even if they still take them when available) – the U.S.-based companies have maintained an outsized squeaky-wheel influence.

It’s been on display lately in public positioning, via their industry association, around an electric-vehicle transition they’ve largely botched so far. Much more stridently than the Japanese companies, they’ve opposed the federal EV sales mandate – which Prime Minister Mark Carney has obligingly suspended – while being among the most vocal opponents of reducing tariffs on Chinese EVs. In effect, they’re claiming lack of EV demand would be devastating for them if they’re compelled to try to meet it, while also tacitly acknowledging there is demand that others could meet.

None of this means Canada can or should turn away from them altogether now. Each still has operational assembly plants – or, in Ford’s case, the Oakville plant where retooling remains under way – that are important to communities and Canadian-owned companies in the domestic auto parts sector. There’s also the EV battery plant that Stellantis has built in partnership with LG Energy Solution in Windsor.

But the relationship won’t get much better amid Mr. Trump’s tariffs and other bully tactics targeting manufacturing outside the U.S. If anything, all of it – suspensions, closings, financial and policy demands, victim-blaming – will get worse.

So while still engaging with these companies when necessary, this is the time for Ottawa to start considering other long-term strategic options to reduce dependence on them – of which there is no shortage, even if each comes with its share of challenges and obstacles.

The most pressing, though contentious, place to start is with the China question.

Canada’s auto industry has faced struggles before. We endured then and can endure now

Few people in the industry seriously believe Canada will be able to keep out Chinese EVs forever, if they continue to be cheaper and better-made than Western products (not to mention if blocking them hurts other industries because of retaliatory action). 

So the question to be asked is whether China would embrace a build-where-you-sell model – possibly involving duty remissions, a mechanism Canada once used to attract Japanese manufacturing, in which tariffs are waived or reduced in return for manufacturing investments.

That may not be something Mr. Carney can immediately embrace, given how much it would poke Mr. Trump, and it’s unclear how much interest China would have in making cars here if it couldn’t access the U.S. market. But it’s a scenario that at least needs to be fully explored.

So, too, does the question of what (if anything) would get other overseas automakers to set up shop here. South Korean companies, conceivably looking to diversify from the U.S. after last month’s bizarre immigration raid on a Hyundai plant in Georgia, are obvious potential targets; so are European ones, after Volkswagen’s initial foray with its battery plant under construction in St. Thomas, Ont. It’s possible duty remissions could be used for this purpose, too, although Ottawa’s enthusiasm to otherwise impose tariffs on imports from friendly countries might be limited.

Then there’s the idea of Canada trying to start its own automaker, which Flavio Volpe – who heads the association for domestic parts makers – has been pushing. It tends to be met with eye rolls by other industry veterans, but shouldn’t be dismissed out of hand as EVs change market and manufacturing dynamics.

These and other strategic options aren’t mutually exclusive; in fact, they could be complementary. If an all-Canadian automaker isn’t realistic, for instance, there’s the possibility of EV-making partnerships between domestic entities and foreign ones that aren’t here yet.

Opinion: Twin crises threaten Canada’s auto industry – but one is entirely within our control

There’s little downside risk to putting some resources into determining which pathways work. And that’s more than can be said for another option that inevitably comes up when the auto sector takes a dark turn despite the billions poured into it, which is just to give up on it or accept a much lesser version.

Set aside, even, the issue of the many thousands of direct and indirect jobs at stake. A country pursuing greater economic sovereignty can’t afford to give up on the industry that best serves as underpinning for other manufacturing – be it when more medical equipment suddenly needs to be produced during a pandemic, or to leverage capabilities toward a new military industrial complex that Ottawa wants to build.

But that industry can’t be contingent on companies that are clearly much less interested in Canada than Canada is in them. We deserve better.

https://www.theglobeandmail.com/business/article-canada-auto-sector-us-automakers/?login=true

 

Edited October 24, 2025 by BeaverFever

[Nationalist]

1 minute ago, BeaverFever said:

We deserve better.

 

Indeed we do.

But we got "Elbows Up" instead...

[BeaverFever]

The key takeaway for me is where it said that since the feds and province under BOTH parties began shovelling bailouts to the big 3 back in 2007, their production has dropped from 1.7 million cars per year to 600,000  and most production in Canada is now the Japanese. TBH I don’t know anyone who wants to buy BiG 3 car unless it’s a pickup truck or a marquee sports car like Corvette or Mustang. Maybe it’s time to say goodbye. 

[SpankyMcFarland]

1 hour ago, BeaverFever said:

The key takeaway for me is where it said that since the feds and province under BOTH parties began shovelling bailouts to the big 3 back in 2007, their production has dropped from 1.7 million cars per year to 600,000  and most production in Canada is now the Japanese. TBH I don’t know anyone who wants to buy BiG 3 car unless it’s a pickup truck or a marquee sports car like Corvette or Mustang. Maybe it’s time to say goodbye. 

Their product is inferior anyway and they’re heading for the scrap heap. If Trump does destroy our car industry we should buy Asian cars, preferably but not necessarily made here. I’ve been buying Japanese and Korean cars nearly all my adult life because they are simply better. Most of us don’t need those monstrous, gas-guzzling American trucks

Edited October 24, 2025 by SpankyMcFarland

[herbie]

OMG we could end up like Australia! The Big 3 abandoned them and they're all driving Toyotas and Chinese EVs.
They can lose another 40 million customers if they really want. 

Can reverse things from 1970s where trains were bringing cars west and going back empty. They had deals where you could bring your car with your family on the train to Toronto cheap.
Maybe when they load up the cars in Vancouver and Prince Rupert and bring them East, they can offer the empty west bound trains and boost Western tourism with similar deals.
Or will they just hike the Destination Charge on cars back East to $3000 to cover their 'loss' ? Whadda you bet on?

Edited October 25, 2025 by herbie

[WestCanMan]

Just popped in here for no other reason than to say that this is the only thread on the main page that was started by a leftist [or a Hamas supporter who probably votes Liberal] and has any worth or merit.

Edited October 27, 2025 by WestCanMan

[herbie]

13 minutes ago, WestCanMan said:

Just popped in here

IOW nothing intelligent to contribute just post more wrong wing word diarrhea.

If the plants owe loans etc. then seize them and put them on the marker.
Offer other countries an AutoPact deal. For every car they build here, they can import one duty free.
Cars built here aren't gonna be tariffed any more than if they were built in other places. Unless Baby Donald throws more temper tantrums against us evil Canucks.

[gatomontes99]

5 minutes ago, herbie said:

IOW nothing intelligent to contribute just post more wrong wing word diarrhea.

If the plants owe loans etc. then seize them and put them on the marker.
Offer other countries an AutoPact deal. For every car they build here, they can import one duty free.
Cars built here aren't gonna be tariffed any more than if they were built in other places. Unless Baby Donald throws more temper tantrums against us evil Canucks.

Dude...you cant criticize anyone for having nothing intelligent to post. All you do is attack people and never contribute a damn thing. 

[WestCanMan]

8 minutes ago, herbie said:

IOW nothing intelligent to contribute just post more wrong wing word diarrhea.

If the plants owe loans etc. then seize them and put them on the marker.
Offer other countries an AutoPact deal. For every car they build here, they can import one duty free.
Cars built here aren't gonna be tariffed any more than if they were built in other places. Unless Baby Donald throws more temper tantrums against us evil Canucks.

It was appropriate to note that a leftist made a major adult contribution to the forum.

Don't come here and drag the thread off topic. 

Quote

Canada needs to start thinking about an auto sector without U.S. automakers

ADAM RADWANSKI

POLICY COLUMNIST AND FEATURE WRITER

PUBLISHED OCTOBER 18, 2025

Canada is stuck in an increasingly abusive relationship with the three traditional North American automakers.

And what governments here need to start asking themselves is whether – and if so, how – they can get out of it and maintain a robust domestic auto industry.

It’s a question that should be top of mind following this week’s announcement by Stellantis NV that it’s moving Jeep Compass productionfrom Brampton, Ont., to Illinois – deference to U.S. President Donald Trumpthat prompted a furious reaction from Canadian politicians.

Discuss...

[gatomontes99]

5 minutes ago, WestCanMan said:

It was appropriate to note that a leftist made a major adult contribution to the forum.

Don't come here and drag the thread off topic. 

Discuss...

All that does is state what governments should not do. What should they do? 

Mexico, Canada and America should aggressively seek the business of the Big 3, as well as every other manufacturing powerhouse. I don't see a fair way to "share". 

[WestCanMan]

50 minutes ago, gatomontes99 said:

All that does is state what governments should not do. What should they do? 

Mexico, Canada and America should aggressively seek the business of the Big 3, as well as every other manufacturing powerhouse. I don't see a fair way to "share". 

Canada just needs to rely less on trade with the US. 

Whether that means expanding our business with European, Japanese and Korean manufacturers, or opening our markets to countries that have previously been banned here, remains to be seen. But clearly "The US gets to make every single make and model and Canada can only buy from us" is not going to work, long term. 

Trump and the US can go to hell if that's all that's on the table. 

[herbie]

33 minutes ago, WestCanMan said:

Canada just needs to rely less on trade with the US.

which is exactly what Carney is trying to do.

33 minutes ago, WestCanMan said:

Trump and the US can go to hell if that's all that's on the table

I agree, if he insists on Canada giving up on cat production I'd love to see Carney or our Trade Ambassadors tell him that to his face, on camera.

Which was exactly the point in my last post: An AutoPact agreement on those terms would give European and Asian carmakers a bigger grasp on the Cdn market and zero loss on the American market. Not violate CUSMA, take advantage of Can-Mexico agreements and position themselves for when Trump gets tossed out on his ass and sensible trade returns.
 

[WestCanMan]

Just now, herbie said:

which is exactly what Carney is trying to do.

Yeah, he tried to get his "elbows up" on Trump too, and his secret service nickname is "roadkill" now. 

It doesn't really make any difference what he's trying to do when he sucks at everything, right?

Quote

An AutoPact agreement on those terms would give European and Asian carmakers a bigger grasp on the Cdn market and zero loss on the American market. Not violate CUSMA, take advantage of Can-Mexico agreements and position themselves for when Trump gets tossed out on his ass and sensible trade returns.

Who cares about CUSMA? Isn't that toilet paper now? 

And FYI, no one in the DNC or US MSM batted an eye when Trump started talking about trade wars with Canada, or even waging economic war on Canada until we become the 51st state. 

What makes you think that a demonrat scumbag like Kamala would be any better than Trump?

The Dems care more about the safety of a drug dealer in a boat than they do about all of Canada.

[herbie]

Your negativism and preformed opinions preclude any hope of anyone accomplishing anything to your satisfaction.
Their political stripe is no indication of their skills or ability.

[SpankyMcFarland]

What about an auto sector without any big local automakers? I wonder about the profit margins on making cars in the future. Granted, it was a great business in the previous century but is that changing? You hear about empty parking spots in Toronto condos because the kids just rent a car when they need one. They’re not so into cars any more as a part of their identity. Whatever about Trump, I’d be surprised if the industry employs anything like as many here in twenty years time as it does now. I remember the great wringing of hands in Britain as the great brands there died or passed into foreign hands. The country survived. By all means encourage foreigners to build cars here but recognize it’s a mature industry with modest returns. They will be doing it more cheaply elsewhere. 

Edited October 29, 2025 by SpankyMcFarland