Securing new product programs in passenger vehicle assembly is certainly a critical measuring stick of Canada’s powerhouse prowess. Since 2000, the closure of major Canadian assembly facilities dealt devastating blows to workers and to local communities in: Sainte-Thérèse, Quebec (GM car plant); Windsor, Ontario (Chrysler truck plant); Talbotville, Ontario (Ford car plant); Oakville, Ontario (Ford truck plant); and Oshawa, Ontario (GM truck plant). The resultant loss of production capacity also significantly affected jobs across the supplier base and elsewhere in the economy. Locating new product programs, as was done following the restart of truck production at the Oshawa Assembly Complex, has major spillover benefits, including the restart of parts supplier facilities and re-employment for thousands of workers.
However, new vehicle assembly programs are not the only measure of auto sector success. The opportunities for Canada today require a “whole-of-supply chain” assessment of the industry’s growth potential. This value-chain strategy includes major investments in needed upstream component parts production, including those related to future electric vehicle (EV) production, such as battery cells and related modules5, electric powertrain and drivetrain systems, power electronics, thermal heating systems and others.
Connected with this value-chain approach, Canada must expand its capacity in mining and refining critical minerals needed to feed the broader industry, including lightweight metals and battery grade precursor materials. In fact, Canada is the only country in the world with significant mineral deposits needed for advanced battery production, including nickel, graphite, lithium and cobalt. Recognizing the strategic importance of this upstream development to the Canadian auto sector’s growth will provide Canada a unique advantage and a foundation upon which an industrial strategy can be built. Canadian officials must not squander this advantage by allowing the export of raw materials for refining and upgrading outside of Canada.
5 For more information on Canada’s battery supply chain potential, see Clean Energy Canada, Turning Talk into Action: Building Canada’s Battery Supply Chain (May 2021): https://cleanenergycanada.org/wp-content/uploads/2021/05/Turning-Talk-into-Action_Building-Canadas-Battery-Supply-Chain.pdf
Canada has a patchwork of rules and procedures governing the disassembly of vehicles, the proper disposal of hazardous materials and the recovery of reusable parts. The rise of battery electric vehicles (BEV) brings with it a host of new challenges, and opportunities, to advance Canada’s vehicle recycling programs and secondary use for critical parts. Provincial Extended Producer Responsibility (EPR) programs that place responsibility on automakers to track materials and properly manage hazardous components17 are positive initiatives that must extend across the country. These initiatives should also include growing Canada’s capacity to recycle and repurpose lithium-ion batteries. Expanding the scope of component parts in EPR programs can also encourage automakers to better utilize existing in-house networks of Parts Distribution Centres to store parts and manage after-market logistics.
17 For example, see B.C. Ministry of Environment and Climate Change Strategy, Extended Producer Responsibility Five-Year Action Plan 2021-2026: https://www2.gov.bc.ca/assets/gov/environment/waste-management/recycling/recycle/extended_producer_five_year_action_plan.pdf