Creating Jobs for Ontario Families: Harper Government Invests in Canada's Auto Sector, Creating 1,200 New High-Quality Jobs

GUELPH, ONTARIO--(Marketwired - Jan. 12, 2015) - Industry Canada

Up to 1,200 new jobs will be created in Ontario's auto sector thanks to an investment by the Government of Canada.

The Honourable Lisa Raitt, Minister of Transport and Member of Parliament for Halton, today announced a $50.7-million investment in Linamar Corporation to produce the next generation of automotive transmissions. This investment will result in the creation of 1,200 new high-quality jobs and the company will maintain a minimum of 6,870 jobs at its Ontario facilities. The Government of Canada's $50.7-million repayable contribution represents 10 percent of Linamar's total $507-million investment in Ontario's automotive industry.

Linamar will undertake an important new program to develop fuel-efficient automotive transmissions in southwestern Ontario, bringing leading-edge technology to Canada. Linamar is a world leader in auto parts manufacturing with operations in 12 countries. Linamar's headquarters are in Guelph, Ontario.

While Linamar could have based its latest project in other countries, it chose to take advantage of Canada's manufacturing landscape, low taxes and open markets.

Quick facts

• Funding for the project is provided through the Automotive Innovation Fund (AIF). To date, AIF investments have leveraged up to $2.3 billion for R&D and innovation in Canada.

• Canada's automotive industry is a key sector of the economy. It contributes 10 percent of the country's manufacturing GDP and 13 percent of total merchandise exports. The industry employs more than 117,000 Canadians directly and another 377,000 indirectly.

• Canada's two most recent trade agreements, the Canada-European Union Comprehensive Economic and Trade Agreement and the Canada-Korea Free Trade Agreement, promise to add at least $14 billion annually in new economic activity, equivalent to creating more than 90,000 new jobs.

• Based in Guelph, Ontario, Linamar Corporation is one of Canada's largest manufacturers of automobile parts, focusing on precision metallic components and driveline systems designed for passenger vehicles.

Quotes

"Our government is committed to creating jobs and ensuring Canada's auto sector remains globally competitive. This investment will create new well-paying jobs for Ontarians and increase our country's ability to compete internationally for new auto sector investment."

- Industry Minister James Moore

"Canada is a great place to build cars. Canada has much to offer automakers and parts manufacturers: our Automotive Innovation Fund, the new Windsor-Detroit bridge, support for automotive R&D, a stable economy, a low corporate income tax rate, a highly skilled and productive workforce, well-developed infrastructure and access to markets."

- Lisa Raitt, Minister of Transport

"We are thrilled with the support shown by both the Ontario and federal governments through this investment in our Ontario plants. Our Canadian plants are our company's most productive globally thanks to a talented, skilled workforce with an amazing work ethic and a dedication to process and product innovation. That combination of innovation and efficiency is what makes us competitive on a global scale. It is critical for our governments to create a competitive environment for companies to invest. They certainly have done so today with this funding."

- Linda Hasenfratz, Chief Executive Officer, Linamar Corporation

"As a proud Canadian tooling supplier to Linamar for some 35 years, we are excited to hear of this new investment. It will help fuel Linamar's growth in this region, creating local jobs not only within the company but also within the supply chain."

- John Duffy, President, Triumph Tool Ltd.

Related products

- Previous Automotive Innovation Fund announcement

Associated links

- Linamar Corporation

- Automotive Innovation Fund web page

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Backgrounder

Automotive Innovation Fund Investment Announcement in Southwestern Ontario

Introduction

The Government of Canada is committed to creating jobs, growth and long-term prosperity and to keeping Canada's automotive manufacturing sector globally competitive and innovative.

To this end, on January 12, 2015, Transport Minister Lisa Raitt announced a repayable contribution of up to $50.7 million through the Automotive Innovation Fund (AIF) to Linamar Corporation, a major manufacturer of automotive components. The funding will support a project bringing leading-edge technologies to Canada and creating high-quality jobs in southwestern Ontario.

About the project

Linamar is investing in a project to produce fuel-efficient powertrain components for next-generation transmissions in southwestern Ontario. The project will provide short- and long-term economic benefits to Canada. It will lead to the creation and retention of high-quality, well-paying jobs, opportunities in research and development, and increased activities within the Canadian automotive supply chain. Federal funding for the project is provided through the Automotive Innovation Fund.

Linamar will invest over $500 million, create 1,200 high-quality jobs and increase its R&D expenditures once the project is fully ramped up.

About Linamar Corporation

Based in Guelph, Ontario, Linamar is one of Canada's largest automobile parts manufacturers. The company produces automotive parts and supplies in industrial markets across the globe. It has manufacturing centres across North America, Europe and Asia. In particular, the company focuses on precision metallic components and driveline systems designed for passenger vehicles as well as industrial markets.

About the Automotive Innovation Fund

The government first introduced the Automotive Innovation Fund (AIF) in Budget 2008, providing $250 million over five years. On January 4, 2013, Prime Minister Harper announced the renewal of the AIF.

The renewed fund is providing $250 million over five years (2013-2018) to automotive companies in Canada in support of strategic, large-scale R&D projects. In Budget 2014, the government announced another $500 million over two years for the AIF.

The Automotive Innovation Fund aims to:

• build automotive R&D capacity in Canada and secure high-value jobs;
• enhance the government's science and technology and environmental agendas;
• support the development, implementation and commercialization of advanced and green technologies and advanced products or processes;
• promote long-term economic benefits to Canada, including significant job creation and retention; and
• serve as a catalyst for further private sector investments to foster Canadian competitiveness.

AIF support has leveraged up to $2.3 billion in R&D and innovation investments in Canada's automotive sector and is contributing to:

• the development and commercialization of new products;
• advanced and expanded flexible manufacturing processes and facilities;
• enhanced research and development capacity;
• leading-edge engineering and design; and
• made-in-Canada innovation.

To date, the AIF has provided repayable contributions to four companies, including up to:

• $80 million toward an investment of up to $730 million by Ford Motor Company of Canada to establish a flexible engine assembly plant and create an advanced powertrain research centre in Windsor, Ontario;
• $54.8 million toward an investment of up to $365 million by Linamar Corporation to develop and commercialize advanced components and modules in three product areas: transmissions, engines and drivelines;
• $70.8 million toward an investment of up to $506 million by Toyota Motor Manufacturing Canada Inc. to maximize production efficiency, reduce emissions and upgrade equipment to permit the production of more fuel-efficient vehicles including electric vehicles;
• $21.7 million toward an investment of up to $199 million by Magna International to develop energy-efficient components for vehicles and innovative powertrain components for next-generation vehicles;
• $16.8 million toward an investment of up to $120 million by Toyota Motor Manufacturing Canada Inc. to establish an assembly line for the new Lexus RX450h hybrid, supporting hybrid expertise in the Canadian supplier base, and to increase capacity for the RX350 model in Cambridge, Ontario; and
• $71.6 million toward an investment of up to $716 million to install a state-of-the-art global manufacturing platform at Ford Motor Company of Canada's Oakville Assembly Complex and to conduct fuel consumption and emissions R&D.

Canada's approach to creating a competitive automotive industry

Canada has much to offer the automotive manufacturing industry: the AIF, a large and sophisticated supply cluster, the new bridge between Windsor and Detroit, support for automotive R&D, a stable economy, a highly skilled and productive workforce, well-developed infrastructure, access to markets and a favourable environment for automotive R&D.

The AIF is part of the government's broader approach to create economic conditions that support a strong Canadian auto industry. The government's approach also includes a fiscal and economic framework that will keep the industry competitive, including:

• a sound banking system;
• the lowest overall tax rate on new business investment in the G7;
• the lowest debt-to-GDP ratio in the G7;
• a triple-A credit rating; and
• investments in automotive R&D, including Automotive Partnership Canada and AUTO21.