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Harper government welcomes investement in canadian research and development

OSHAWA, ONTARIO – Prime Minister Stephen Harper today welcomed the announcement by General Motors of Canada Limited (GM Canada) that it will make significant investments in research and development (R&D) activities in Canada.

“Auto assembly is the engine of Southern Ontario manufacturing and its demand for components creates economic growth right across the country,” said Prime Minister Harper. “Investment in R&D brings long-term benefits to Canada, drives made-in-Canada innovation, increases our ability to compete internationally and creates high-paying and stable jobs.”

The commitments outlined today by GM Canada’s include:

· Investing in new streams of state-of-the-art advanced technology research at the Canadian Engineering Centre in Oshawa, positioning the facility as an integral part of GM’s global engineering and R&D networks;

· Enhancing partnerships with automotive suppliers that strengthen innovation and competitiveness in the Canadian supplier base, including new co-development projects and greater opportunities for start-ups to access funding through GM Ventures; and

Continuing to develop formal technology linkages among Canadian universities, institutes, suppliers and manufacturers in key technology areas.

In 2009, the Governments of Canada and Ontario contributed $9.5 billion US in restructuring assistance to GM Canada, in part to avoid the collapse of a much broader system of suppliers, parts companies and R&D in the auto sector. The company committed at that time to making significant capital investments in its Canadian operations over the life of the agreement, already announcing investments totaling $1 billion. GM also committed to investing $850 million US in R&D in Canada from 2009 through 2016. GM Canada’s investment in R&D activities in Canada is one of the tangible benefits being realized by Canadians as a result of the 2009 restructuring support.

Canada’s auto sector is the largest industry within the Canadian manufacturing sector and a key driver of the economy. The auto sector employs hundreds of thousands of Canadians, directly and indirectly, including thousands of auto parts makers.


Backgrounder



General Motors of Canada Limited



The Government of Canada is committed to supporting initiatives that increase jobs, promote growth and support Canada’s long-term prosperity. To this end, on July 24, 2012, Prime Minister Stephen Harper expressed his support for General Motors of Canada Limited’s (GM Canada’s) commitment to invest $850 million US from 2009 through 2016 towards research and development (R&D) activities in Canada. The majority of this commitment will be invested from 2012 through 2016.

Government Restructuring Support for General Motors

On June 1, 2009, the Governments of Canada and Ontario provided $9.5 billion US in a joint package of assistance to support the restructuring of General Motors.

In return for the restructuring assistance, General Motors agreed to make significant capital investments in its Canadian operations over the life of the agreement (2009-2016), and to invest $850 million US in R&D in Canada.

The assistance provided by the Governments of Canada and Ontario to General Motors and Chrysler in 2009 prevented the collapse of a much broader system of suppliers, parts companies and R&D footprint.

The Government of Canada achieved its primary goal of protecting automotive jobs in Canada in the midst of the recession, and positioning the Canadian automotive sector for long-term competitiveness.

The Government continues to hold an equity stake in General Motors, and is committed to exit from it as quickly as appropriate, while maximizing returns to Canadian taxpayers.

General Motors Investments in Canadian R&D

General Motors of Canada already plays a leadership role in automotive design and engineering, engaging in innovative R&D partnerships with leading Canadian universities and research institutes. Today, the company announced it is increasing R&D investments in Canada, including:

Investing in new streams of state-of-the-art advanced technology research at the Canadian Engineering Centre in Oshawa, positioning the facility as an integral part of GM’s global engineering and R&D networks;
Enhancing partnerships with automotive suppliers that strengthen innovation and competitiveness in the Canadian supplier base, including new co-development projects and greater opportunities for start-ups to access funding through GM Ventures; and
Continuing to develop formal technology linkages among Canadian universities, institutes, supplier and manufacturers in key technology areas.

General Motors Investments in Canadian Facilities

Since emerging from restructuring in July 2009, General Motors has invested approximately $1 billion in Canadian facilities. Most recent investments include:

In 2009, GM Canada invested a total of $96 million to prepare the CAMI plant in Ingersoll, Ontario, for production of the Chevrolet Equinox and GMC Terrain.
In 2010, GM Canada announced new investments in its St. Catharines Powertrain facility- a $235 million investment to build GM’s next generation of fuel-efficient engines and $245 million to build fuel-efficient six-speed transmissions. These investments helped secure some 800 jobs at the plant.
In 2011, GM Canada announced investments of $117 million for production of the new Cadillac XTS and $68 million to produce the next-generation Chevrolet Impala on the Flex Line at the Oshawa Assembly Plant These investments helped secure some 750 jobs at the Oshawa Assembly Plant.
In 2012, GM Canada announced an $8.8 million investment to ready the St. Catharines powertrain facility to manufacture the next generation of the six speed Front Wheel Drive (FWD).

Automotive Industry in Canada

The automotive industry plays a very large role in the Canadian economy. It is the largest manufacturing sector in Canada, contributing to 12 percent of manufacturing GDP and 11.5 percent of total merchandise exports.

In 2011, the automotive industry directly employed more than 112,000 Canadians, plus another 332,000 indirectly. Ontario is the largest concentrated centre for auto manufacturing in North America.

The Canadian auto parts sector has more than 1,000 establishments, with close to 80 per cent of the companies employing 200 workers or less. (Key suppliers include Magna, Linamar, Martinrea and ABC Group.)

For every assembly plant opened in North America, 19 direct suppliers open up within 60 miles of the plant. Each auto assembly job creates 6.1 indirect jobs in the Canadian economy.

Assembly plants and parts companies have driven growth and prosperity across Canada and contribute to the growth of related manufacturing industries, including steel, rubber, plastics, and many others.










PMO Press Office    7/24/2012


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