If you build it, they will drive

Automotive production in Canada has a long and storied history.

In 1867 Henry Seth Taylor built the first automobile in Canada, a steam-powered, one-off jalopy that made Chitty Chitty Bang Bang look like a Bugatti.

Taylor unsurprisingly was also the first Canadian to be involved in a car accident, which is what happens when a car built without brakes descends a steep hill. The car was wrecked, and its inventor turned his attention to building a steam-powered yacht. I assume it’s because there is less to hit on the water.

It wasn’t until 1904 that automotive production would start in this country in a major way. That year the Ford Motor Company of Canada was founded, producing and exporting the Model C for countries within the British Empire (excluding Britain and Ireland). The Walkerville, Ont., facility produced 117 cars its first year.

Automotive production was then, and is now, important to the Canadian economy, particularly in southern Ontario. But it is an industry in decline as all-important assembly plants shift to other locales.

In fact, Canada now sits in 11th place in the world in terms of vehicle output – a number that until recently was a quite-respectable 4th.

A well-educated, well-trained, and productive workforce and low corporate tax rate no longer seem to be enough to convince OEMs to build assembly plants here. This is because the total cost of doing business in Canada is higher than in competing countries, which include Mexico and certain locations in the U.S. We may be qualified and productive, but we also are expensive.

This is one of the reasons that the nation’s share of North American car/light-truck production has fallen to 14.1 per cent from 17 per cent just a few years ago.

More damning is the fact that automotive OEMs invested $7 billion in Mexico last year while spending only $750 million in Canada.

Even though all five automakers that currently produce cars here – Fiat Chrysler, Ford, GM, Honda, and Toyota – are making investments in their assembly plants here, no new vehicle production, and no new assembly plants, are currently planned for Canada. These new builds, or greenfield investments as they are called, are headed elsewhere.

They are chasing the almighty dollar … just not the Canadian dollar.