Automotive News Canada - March 2017 - 8

OPINION

03.17

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Conservative candidate hints
at killing industry subsidies
Watching the TV news about Trump and trade might give the
impression that the Canadian auto industry will suffer, but
executives at the first Automotive News Canada Congress see
opportunity. ( P H O T O : A R N E G L A S S B O U R G )

Growing Canada's
industry? Doable
JEFF MELNYCHUK

EDITOR-IN-CHIEF

HOW FORTUNATE WOULD YOU BE TO GET 30 MINUTES WITH
Magna's Don Walker, GM Canada's Steve Carlilse or Unifor's fiery
president Jerry Dias? What if you could get 30 minutes with all of
them - one right after the other - and many others such as
Aston Martin's Andy Palmer, Nissan Canada boss Joni Paiva and
new Ford Canada President Mark Buzzell?
What you could you learn?
The first Automotive News Canada
Congress was held Feb. 16-17 in conjunction with Canadian International AutoShow in
Toronto and provided a rare and valuable
snapshot of the issues the industry faces.
And some real opportunity, as it turns out.
The speakers have different viewpoints on
the same situation, but make no mistake,
most are in exactly the same situation: grappling with new technology that someone else will master if they
cannot. Maria Soklis from Cox Automotive Canada said that dealers need to be thinking about completing deals 100 per cent
online. Don Walker says Magna is investing in more than 30 startup tech companies. Nearly every industry speaker realizes that
more electric cars and autonomous driving are coming, although
few can agree on when and how. Technology is only part of that
equation. Legislation, cost and public acceptance appear to be far
greater mountains to scale.
The real elephant in the room, however, was U.S. President
Donald Trump's trade policy - whatever that is - and the effect it
might have on the Canadian auto industry, an industry that has
been bleeding jobs for years while barely hanging on to existing
factories. But what could have been a very gloomy conversation
was actually quite the opposite.
Unifor's Dias has strong opinions as to why the Canadian industry has teetered: bad trade deals and the previous federal
Conservative goverment that, Dias says, just didn't care. Many are
fearful of Trump's policy, but others, Dias included, think that renegotiating the North American Free Trade Agreement opens up all
sorts of possibilities for an industry resurgence. That and a federal
Liberal government that seems to understand that the industry
needs help to be more competitive with industry in other countries.
In fact, Ontario Minister of Economic Development Brad Duguid
and Federal Minister of Innovation, Science and Economic
Development Navdeep Bains both spoke at the Congress, pledging
support for Canadian industry, especially technology.
The upshot? Canada has a real shot at growth.
See the full story on Page 18 of this issue. - ANC

New incentives
and NAFTA
renegotiation could
tilt the board
in favour of
Canadian industry

EST. 1925.

PUBLISHED WEEKLY BY CRAIN COMMUNICATIONS, INC.
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Maxime Bernier, arguably
the frontrunner for the
Conservative Party of Canada's
leadership, said something in
Windsor, Ont., on March 6 that
should have caught the attention of Canada's auto sector.
He was in the automotive
capital of Canada when asked
for his thoughts about subsidies
for the auto industry.
"I said no to Bombardier, so
I'd have to say 'no.'"
It's an interesting response
considering Bernier's birthplace
and the recent government
support of the auto sector in
Ontario and the aerospace
industry in Québec.
Bernier is a politician from
Québec, and yet he still
opposed the $372.5-million
loan the governing Liberals just
gave to the aerospace manufacturer based in his home
province.
It should also be noted it
was Bernier's own Conservative
Party that created the
Automotive Innovation Fund
(AIF) in 2008. Granted, when
the Conservatives governed the
fund, which had a total of
$250 million available over five
years, the money was given out

DIGITAL AND
MOBILE EDITOR
AUTOMOTIVE
NEWS CANADA

GREG
LAYSON

COMMENT
as taxable loans.
While Bernier might be
against loans and grants - he
prefers lower corporate taxes
- there's little denying the AIF
and other financial assistance
the Conservatives provided
during the 2008-'09 recession
helped save General Motors
and Chrysler in Canada. The
Conservative federal government loaned the two automakers $13.7 billion to stay afloat.
Similar financial aid was provided in the United States to GM
and Chrysler at the time.
Now, with a Liberal majority
government in charge, the rules
of the AIF were tweaked this
year to allow for non-repayable
grants. And it didn't take long
for automakers to start cashing
in. On Jan. 9, the very day the
changes were announced,
Honda said it would spend

nearly $500 million upgrading
its Alliston, Ont., factory. About
$40 million is coming from the
AIF.
Navdeep Bains, minister of
Innovation, Science and
Economic Development, then
spent the next few weeks handing out grants to parts suppliers. He was still at it on Feb.
17 during the Canadian
International AutoShow in
Toronto.
The grants are something
the industry and even auto czar
Ray Tanguay, who was hired in
part by a Conservative federal
government along with the
Ontario Liberal government, has
wanted for years.
Tanguay said the new AIF
format gives him "something to
sell" when he's trying to persuade automakers and parts
suppliers to expand and invest
in Canada.
Only if Bernier becomes
head of the party in May, and
then his party wins the federal
election in 2019, will we know
for certain if he is serious about
removing one of the most popular tools Tanguay uses to lure
auto investment to Canada.

- ANC

CIAS's success based on passion
THE CANADIAN INTERNATIONAL
AutoShow in Toronto is bucking
an industry trend by posting
gains on all fronts, and it's for
one simple reason: billing it as a
general-interest event is paying
dividends.
As auto shows elsewhere
face declining participation
among automakers and consumers alike, this year's show
posted its best overall attendance figures for the second
year in a row, and every automaker in the Canadian market
but one (Tesla) had a presence
on the show floor.
The Internet makes
cross-shopping easy these days,
which makes touting it as a primary reason to visit an auto
show no longer the draw it once
was. It might theoretically save
consumers driving time between
dealerships, but traveling into
city cores and spending money
on gas, parking, tickets and
refreshments is a costlier proposition for many. It takes more to
pull them through the turnstiles.
CIAS delivers on that by giving car lovers of all stripes a
broader range of incentives for
investing their money and time.
The show attracted a global
premiere in the Hyundai Accent
and 16 concept cars in total
this year, five more than in
2016, including the North
American debut of the Aston
Martin AM-RB 001 sports car.
In the Auto Exotica exhibit,
performance enthusiasts saw
rare supercars such as the
Bugatti Chiron and Pagani
Huayra alongside McLarens and

To automakers, auto shows are about dollars and cents, but
the people who go to shows are often passionate enthusiasts. CIAS caters to those people and attendance shows it.
( P H O TO : S T E P H A N I E WA L L C R A F T )

TORONTO
CORRESPONDENT

STEPHANIE
WALLCRAFT

COMMENT
classic Ferraris.
The Art and the Automobile
exhibit brought Canada's automotive history together in honour of the country's 150th anniversary with specimens like
Canada's first car, the Seth
Taylor Steam Buggy, and one of
two McLaughlin-Buicks handbuilt by General Motors of
Canada in Oshawa in 1927 for
that year's royal visit.
And the show tipped its hat
to the 50th anniversary of
Formula One racing in Canada

with a room full of classic race
cars, including Gilles
Villeneuve's 1978 Montreal
race-winning number-12 Ferrari.
Free child care was offered,
but many families opted not to
use it, instead roaming the floor
with children in tow. This is how
young automotive obsessions
begin: with children holding their
parents' hands ogling fascinating cars.
It's this ability to treat
Toronto's auto show as an event
rather than a shopping mall
that's giving its organizers an
edge. For those in the industry,
shows are all dollars and cents,
which makes it easy to forget
that for consumers the automobile often remains about passion.
CIAS fosters it like no other.
Competitors would be wise to
take note. - ANC

Table of Contents for the Digital Edition of Automotive News Canada - March 2017