Government sweetens pot to attract auto investment

The Ontario government announced it will spend $625 million over the next five years to lure automotive OEM assembly plants to the province. According to published reports, $500 million of the total is targeted to go to an existing provincial research and development fund; another $125 million will be spent on training and infrastructure improvements. Ontario Premier Ernie Eves has called on the federal government to contribute funding as well.
Ontario has been on the losing end of new OEM automotive investments in recent years. Since 1990, only one new auto plant has been built in Canada. In the same period, six plants have been built in Mexico and 10 in the U.S., primarily in southern states which have coughed up large amounts of cash in order to lure automotive companies.
Both DaimlerChrysler and Ford are negotiating with Canadian governments for economic aid to build flexible assembly plants in Canada. The companies are expected to make a decision later this year.