Question Period Note: SUPPORTING CANADA’S AUTOMOTIVE INDUSTRY AND ZERO-EMISSION VEHICLES (ZEVs)

What is the Government of Canada doing to support Canada’s automotive sector, particularly as it transitions towards production of zero-emission vehicles?

• Canada has everything it needs to lead in the global zero-emission vehicle (ZEV) ecosystem: strength in automotive manufacturing, access to markets, talent, green energy and critical minerals.

• That is why Canada has attracted large anchor investments in zero-emission vehicles manufacturing as well as battery material processing in order to increase the supply of ZEVs and encourage the industry’s transition.

• These once in a generation investments by major industrial players will benefit Canadians, increase the supply of ZEVs and help transform the industry.

• Building on this success, Budget 2024 proposes the Electric Vehicle Supply Chain investment tax credit for businesses that invest in three supply chain segments: electric vehicle assembly, electric vehicle battery production, and cathode active material production.

The Canadian automotive sector supports nearly 550,000 direct and indirect jobs, contributed $18 billion in 2023 to Canada’s gross domestic product, and is one of the country’s largest export industries. The sector is anchored by the presence of five automotive manufacturers: Stellantis, Ford, GM, Toyota, and Honda.

The government supports Canada’s transition to electrified transportation. In 2022, Canada released its 2030 Emissions Reduction Plan, followed by Budgets 2022, 2023 and 2024, which proposed competitive measures to create jobs while fighting climate change.

It is projected that the global sales of electric vehicles (EV) will be over 3 times higher in 2030 than it was in 2023, and Canada is well positioned to be a major player in EV production.

The government has recently attracted large anchor investments in ZEV manufacturing as well as battery material processing, all of which stand to increase the supply of ZEVs and further encourage the industry’s transition. These anchor investments include:

• Honda: $15 billion to create Canada’s first comprehensive electric vehicle supply chain in Ontario;
• Northvolt: $7 billion to build a new EV battery cell facility on land that spans Saint-Basile-le-Grand and McMasterville, Quebec;
• Ford/EcoProBM/SK ON: $1.2 billion to produce cathode active materials in Bécancour, Quebec;
• NextStar Energy (Stellantis/LGES): $5 billion for an EV battery manufacturing plant in Windsor, Ontario;
• VW PowerCo: $7 billion for a cell manufacturing plant in St. Thomas, Ontario;
• GM/POSCO: $600 million to produce cathode active materials, in Bécancour, Quebec;
• Umicore: $1.5 billion for a battery materials plant in Loyalist, Ontario; and,
• Stellantis: $3.6 billion for EV manufacturing at its Windsor and Brampton assembly plants;
• General Motors (GM): $1 billion for production of Brightdrop EV600, an electric light commercial vehicle, in Ingersoll, Ontario;
• Lion Electric: $185 million to establish a battery-pack assembly plant to better control battery design and make the company more competitive in the heavy-duty EV market; and,
• Ford: $1.8 billion for EV manufacturing in Oakville, Ontario.

• The government is also securing ZEV and battery manufacturing investments through Strategic Innovation Fund (SIF) investments, Special Contribution Agreements and the Clean Technology Manufacturing Investment Tax Credit.

• In the global transition to ZEV production, the Government of Canada’s goals are to create jobs across the country, promote growth and investment in the automotive sector, anchor supply chains and support the shift to a net-zero economy.

• Key aspects of the government’s role in this transition include: supporting investments in the vehicle and battery supply chains, investing in public charging infrastructure, supporting consumer purchases of ZEVs and encouraging manufacturers to adopt clean technologies.

• As more and more electric vehicles are being produced worldwide, it is essential that Canada's automotive industry has the support it needs to retool its assembly lines and build new factories to seize the opportunities of the global switch to electric vehicles.

• The government’s investments in the electric vehicle (EV) battery value chain are generational opportunities that are critical for promoting growth, anchoring supply chains and supporting the shift to a net-zero economy.