Canadian government pours C$250 million into auto sector
By Cameron French
OAKVILLE, Ontario (Reuters) - Canadian Prime Minister Stephen Harper unveiled C$250 million ($253.69 million) in government support for the country's auto industry on Friday as Ottawa tries to lure investment to the shrunken sector and create jobs.
Harper announced a five-year extension and new funds for the Automotive Innovation Fund, which was set up in 2008 with an initial C$250 million of government money for research and development projects in Canada's auto industry.
"Our goal in creating this fund was to promote and secure more high quality manufacturing jobs for Canadian workers in this industry through innovation," Harper said, speaking at an event at the Ford Motor Co. (F.N: Quote) assembly plant in Oakville, Ontario.
In order for companies to be considered for the funds, they need to make auto sector investments of more than C$75 million. The government said its support to date has leveraged up to C$1.6 billion in industry investment.
Companies who have made use of the fund include Ford Motor Co of Canada (F.N: Quote), Linamar Corp. (LNR.TO: Quote), Toyota Motor Manufacturing of Canada (7203.T: Quote) and Magna International (MG.TO: Quote).
The government subsidy comes as the industry is still reeling from General Motors Co's (GM.N: Quote) announcement last month that it will produce the next generation of its Chevrolet Camaro in Lansing, Michigan, instead of at GM's Canadian production hub in Oshawa, Ontario, where it currently produces the sports car.
Canadian Auto Workers union president Ken Lewenza welcomed the government support for the auto industry, but said Canada needed to do more to match the level of incentives offered by other countries and certain U.S. states.
"I'm very grateful for the fact that they established the fund, but I still think we have to take a look at a longer term approach to how do we sustain it long term, because what we know is investment comes and goes," Lewenza told reporters at the event. Continued...