Q Why has the provincial government made auto investment such a big priority?

A It is really the engine that drives Ontario’s economy, if not that of the whole country. There are many other sectors that are important but the auto sector drives the manufacturing base and autos account for 20% of all manufacturing in the province.


We have 140,000 people directly employed in auto manufacturing and parts assembly, an additional 190,000 people employed in the after market and sales, and almost half of our exports are dependent on autos.

So this is a huge industry for us and has been for nearly a century. We want to see it continue to be as important in the next century.

Q What do you see as Ontario’s strengths as a location for auto investment?

A We have one of the most highly skilled and highly educated workforces in the world. Our workforce is one of our greatest assets and our government is placing a great deal of importance on education and skills training so in the future we are going to add more resources for those types of things. The first Lexis ever built outside of Japan came off the assembly line in Cambridge, Ontario. The Japanese shipped it back to Japan, took it apart, looked at all the variances and found it was every bit as good, if not better, than anything produced in Japan. That is a pretty big vote of confidence for Ontario.

We have an excellent research & development (R&D) environment. We have tax credits that are some of the most generous in the world under which, for C$100 ($84) of research spending, the cost can be reduced to less than C$42 after all the tax credits are factored in. In terms of cost, we continue to have corporate income tax rates for manufacturing that are 4% below the US average. Recently, KPMG reported that Ontario is about 9% lower than the US in terms of business costs, not withstanding currency fluctuations that we have seen in the recent past.

Ford [which recently made a large investment] was looking at cost considerations, as every company has to do. There were other jurisdictions that were vying for this investment and were ready to roll out the red carpet with all sorts of incentives and subsidies. I think when it looks at Ontario, the company continues to see the advantage that we have with our workforce, as well as our location – half a day’s drive from most of the US market, allowing access to the most lucrative market in the world.

We have a good education system and good public infrastructure. And we have shown that we are willing, through our auto investment strategy, to make additional investments in that regard.

Q Can you tell us about Ontario’s automotive investment strategy, which was announced earlier this year?

A It is a C$500m programme designed to invest in five critical areas: skills training, innovation and R&D, public infrastructure, environmental technologies, and energy efficiencies. We saw the first large investment made as a result of the auto investment strategy by Ford of Canada, which has invested more than C$1bn in the Oakville assembly plant to create its first flexible manufacturing facility in Canada.

This bodes well for the foreseeable future. In fact, the commitment is for a 10-year period that will see Ford continue to build cars in Ontario, not just at the Oakville assembly plant but in other plants throughout Ontario.

We are not just writing a blank cheque; we are also saying to Ford and other auto assemblers that we will work with them, we will invest with them in these critical areas to ensure that we can be competitive in the future.

Q So the government will be partnering with industry as part of the strategy?

A That is precisely what we are pointing to. We need that integration between public institutions and the private sector. If you talk to investors around the world, as I have done for the past year, this is a main priority for them.

So we have to ask, how well can we integrate the public sector institutions that are critically important in terms of R&D – our leading universities and colleges – and how do we utilise better what they offer?

Today, I think you have to use all of those advantages. You have to be able to capitalise on that to ensure you have economic development at the highest level, and our universities and colleges are going to be at the forefront of our economic development. That is our message to investors around the world: that this is a government that wants to integrate, that wants to make sure there is a greater partnership between the private and public sector.

Also, we have just launched a new commercialisation agenda that I had the privilege to announce. It is all about making sure that we take full advantage of research that is being conducted in our public labs. It will take ideas and concepts out of the lab and into the marketplace, and involves all the steps that are necessary to make that happen. It is a total structure that we are putting in place to make technology transfer happen much more easily than in the past.

Q What challenges does Ontario face in terms of competing for auto dollars?

A There was a period of time when we were not seeing any new investments made here in the province. Obviously, when we look at the world marketplace, competition from places like China, Korea, South America and to a certain extent Mexico concerns a lot of people. Low-cost wages continue to be a factor but I think as we invest more in innovation and R&D we can overcome those cost differences.

And this is the only way we can compete in the future. It is a question of being cost-competitive at the very highest level. But at some point innovation and R&D begin to offset low-cost wages.

Ontario is poised to compete with the rest of the world. It is a great place to invest for all the reasons I have already mentioned, but it is also a great place to raise a family. Our quality of life is second to none: we have liveable cities, low crime rates and good educational institutions. And we have publicly funded healthcare, which this government has identified as a priority. We are making critical investments and making sure that we also have a healthcare system that is more efficient and produces the right kind of quality.

We are a very progressive and inclusive society and we have a diverse population, which is another advantage that we can boast. When investors are looking at various jurisdictions, these quality-of-life issues are important.