Manufacturing Savvy

Is Canada Getting It Right by Funding Auto Innovation?

The answer is yes.

Prime Minister Steven Harper explains that today's announcement of a five-year extension of the $250 million Automotive Innovation Fund is a sound economic investment. That's because prior funding yielded a six fold investment return.  

The government says its original investment stimulated some $1.6 billion in innovative projects across the industry, and resulted in half a million spin-off jobs, as reported by the CBC News.

The Fund, established in 2008, was given for projects that would spur private sector investment of more than $75-million over the five years. The emphasis was on strategic, large-scale research and development according to an article in the Financial Post. 

Companies such as Magna International Inc., Ford Motor Co. of Canada, Ltd., Toyota Motor Manufacturing Canada, and Linamar Corp. have tapped the funds. 

However today's auto sector is waning with GM  halting production of a model in a plant in Ontario and Ford having already closed a plant in Ontario.  

So it seems new investment might just be what's needed.

Discuss this Blog Entry 1

on Jan 10, 2013

I think this is just another example of what countries around the world are doing to support industries within their borders and to give them a slight edge (hopefully) over companies outside their borders.

We need to get past the whole 'government get out of our way' attitude and while the US needs to be a little more smart about it, (Solyndra & A123...I'm looking at you) we shouldn't be so hesitant about allocating and investing some federal dollars into an industry that will give us an edge and add to employment down the road.

If you remove the dogma and politics, continued government financial support for specific industries, especially in shaky economic times, makes a lot of sense.

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