Many businesses are contributing to the greening (or decarbonizing) of the Canadian economy by actively reducing their carbon footprint and/or offering solutions to everyday environmental issues. Taking a greener approach to life and business is a responsibility that compels many of us and something Canada’s automotive industry takes very seriously.

Simply stated, a carbon footprint is the total amount of greenhouse gases (including carbon dioxide and methane) that are generated by human action. The average carbon footprint for a person in the United States is 16 tonnes annually, one of the highest rates in the world. And Canada’s per-person footprint of 15.5 tonnes annually runs a close second. We are more than twice that of people in Europe (6.4), and three times the world average of 4.8.

These sobering statistics make Canada’s commitment to the creation and support of more ecologically conscious production methods—together with the auto industry’s embrace of digitization and its transition to the manufacture of electric vehicles—all the more necessary. 

Let it roll

In an Environment and Climate Change news release entitled Let it roll – The Government of Canada moves to increase the supply of electric vehicles for Canadians, the Federal government stated:

“Electric vehicles not only help keep our air clean, they can help families save money on monthly bills, too. Rising and unpredictable world oil prices and the growing desire by Canadians to lower their environmental footprint has more households and businesses looking to get off the gasoline and diesel roller-coaster by making the switch to zero-emission vehicles (ZEVs). When Canadians go to buy a new car, the Government of Canada is taking action to put more ZEVs on the roads.”

This undertaking was expressed by Steven Guilbeault, Minister of Environment and Climate Change, in a series of specific regulations that set ZEV sales targets for manufacturers and importers of new passenger cars, SUVs, and pickup trucks. He noted:

• At least 20% of new vehicles sold in Canada will be zero emission by 2026.
• At least 60% of new vehicles sold in Canada will be zero emission by 2030, and 100% by 2035.

These targets are designed to increase supply so that more Canadians who want a ZEV can buy one. In addition to making sure there are more ZEVs to buy, the government also announced the following initiatives to make buying and charging an electric vehicle (EV) easier for Canadians. The Federal government will:

• Invest in 50,000 more EV charging stations across the country, for almost 85,000 federally funded chargers across Canada by 2027. This is in addition to charging stations supported by provincial governments and the private sector.
• Renew the program that provides Canadians up to $5,000 toward the cost of buying or leasing a ZEV. Over 180,000 individuals and businesses have taken advantage of this program to date.
• Make investments in EV manufacturing in Canada, which will mean made-in-Canada ZEVs by Canadian auto workers and for Canadian drivers to buy.

Two promising and prestigious partnerships

These government initiatives have not been undertaken in isolation. They are moving in lockstep with partnerships announced last year with two leading German automakers, Volkswagen AG and Mercedes-Benz AG.

As reported in Environment Journal: “These agreements will further collaboration with two innovative global players across a range of sectors, help secure Canada’s position as a leading centre of excellence for the manufacturing of electric vehicles and batteries and help ensure that Canada is a destination for investments in this space.”

The article quoted François-Philippe Champagne, Minister of Innovation, Science and Industry, who said: “Canada is quickly becoming the green supplier of choice for major auto companies, including leading European manufacturers, as we transition to a cleaner, greener future. By partnering with Volkswagen and Mercedes, Canada is strengthening its leadership role as a world-class automotive innovation ecosystem for clean transportation solutions. Canada is committed to building a strong and reliable automotive and battery supply chain here in North America to help the world meet global climate goals.”

Dr. Herbert Diess, CEO of Volkswagen Group, commented: “Working hand in hand with governments around the world is an absolute prerequisite to meet our climate goals, and I want to thank the Canadian government for its support. The supply of battery raw materials and the production of precursor and cathode materials with a low carbon footprint will allow for a fast and sustainable ramp-up of battery capacity – a key lever for our growth strategy in North America.”

Added Markus Schäfer, member of the management board of Mercedes-Benz Group AG and chief technology officer responsible for development and procurement: “Mercedes-Benz plans to go all electric by the end of this decade, wherever market conditions allow. To scale up our electric vehicle production, direct access to primary sources of raw materials is needed to improve the resilience and sustainability of the electric vehicle supply chain. Thanks to our memorandum of understanding with Canada, Mercedes-Benz has a strong and capable partner to break new ground for a new era of sustainable transformation in the automotive industry.”

Assessing the impact

The likely impact on employment in the Canadian automotive industry due to these ground-breaking developments should not be underestimated. It is expected that they will:

• Enhance collaboration with Canadian companies along the electric vehicle and battery supply chains.
• Support the development of a sustainable critical mineral supply chain in Canada based on environmental, social and governance principles.
• Stimulate research and development while identifying potential further areas for investment in Canada’s increasingly dynamic ZEV space.

Let’s not forget that these initiatives are coming fast on the heels of several others designed to build a cleaner, greener future for Canadians. Let’s consider just one we have recently reported on, but believe is worth revisiting.

Volkswagen AG & Mercedes-Benz AG follow Stellantis & LG Energy Solutions

Stellantis, formerly Fiat Chrysler, and South Korean battery maker LG Energy Solutions (LGES) announced last year that they will invest more than $5 billion in building a new large-scale battery manufacturing plant in Windsor. The plant is expected to be operational by 2024 and will create an estimated 2,500 jobs.

As reported by Invest Windsor Essex: “Investment by Stellantis and LGES is part of a larger trend that has seen more than $17 billion in announced investment in Ontario’s automotive sector since the beginning of 2021.”

The same story quoted Flavio Volpe, president of the Canadian Automobile Parts Manufacturers’ Association: “Ontario has had the greatest new investment in vehicle production in its history over the past two years.”

Most of this investment, worth approximately $13 billion, is in electric and battery production. And by passing the Inflation Reduction Act, US legislators have given Canada a further boost to its EV ambitions.

According to GM Canada’s David Paterson, this legislative initiative could give Canada an advantage over the U.S. and Mexico: “What goes into our [sic] batteries are cathode active materials, which are mainly made of nickel and other critical minerals that we happen to have in abundance here in Canada.”

Finally, Ford recently increased its commitment to producing EVs in Canada. The automaker will be investing $1.8B (CAD) to create a manufacturing hub in Oakville. The revamped plant will be expanded and updated in a six month renovation scheduled to start in the second quarter of 2024. Post-update, it will be known as the Oakville Electric Vehicle Complex, CNBC reported.

Change is hard, but necessary

All these developments have had, and will continue to have, a massive cumulative effect on employment in the Canadian automotive industry and will further empower the workforce retraining and upskilling process that is already transforming a sector that contributes $16 billion to our gross domestic product and supports nearly 500,000 direct and indirect jobs.

Greening our economy makes not just sound environmental sense. It makes sound economic sense, too, because it is demonstrably revitalizing the automotive sector, among other industries.

Follow FOCAL to stay informed

We’ve got a lot of work ahead of us and we’re geared up to handle it. Please follow FOCAL on LinkedIn, Facebook, Twitter and Instagram to stay informed about the progress we’re making  and gain access to resources and special events as well as funding opportunities for employers. 

We encourage everyone reading this blog to share it with their professional networks to best share these opportunities with automotive sector staff and employers. Again, the FOCAL team welcomes your questions and feedback – you may contact us at your convenience.