Federal government pledges $1 billion in auto sector aid with TPP pact
The funds will keep Canada "in the game," said analyst Dennis DesRosiers.
The new Trans-Pacific Partnership (TPP) trade agreement will include a $1-billion pledge for the auto sector to help protect the industry from foreign competition.
Prime Minister Stephen Harper has announced that a re-elected Conservative government would provide a $1-billion package over a decade by extending the government’s Automotive Innovation Fund.
The Conservatives agreed to phase out Canada’s 6.1 per cent tariff on imported vehicles over five years this week when it signed the TPP partnership with 11 other countries – a move that was met with mixed reviews in Canada, with critics warning that the removal of the tariff threshold would kill thousands of auto-sector jobs.
Speaking to the Canadian Press, Toronto-based auto industry consultant Dennis DesRosiers said the investment proposed by the Tories wouldn’t be considered huge in the always-costly car business, but it would help keep the Canadian industry afloat. “The name of auto policy everywhere in the world comes down to three words: cut a cheque,” DesRosiers is quoted as saying. “This is a game where a billion dollars can be blown out the door on one project. This is $100 million per year, but without it we’re dead – with it we’re at least in the game.”
Also speaking to the Associated Press, Flavio Volpe, president of the Automotive Parts Manufacturers’ Association (APMA), said Harper’s election pledge is a significant amount of money that sends a positive signal the Tories are committed to keeping the auto industry in Canada.