Assessing the economic and labour market impacts

Canada’s automotive manufacturing sector, a key driver of the country’s manufacturing and economic growth, is undergoing a significant shift towards zero-emission vehicles (ZEVs) production, aligning with domestic and global efforts to reduce carbon emissions and achieve net-zero by 2050. At the core of its heavy-duty vehicle manufacturing industry is Quebec’s assembly industry where the majority Canada’s heavy-duty vehicles are produced.

The move from producing internal combustion engine vehicles (ICEVs) to electric vehicles (EVs) in Quebec’s heavy-duty vehicle manufacturing industry presents both opportunities and challenges. The shift offers the opportunity to develop new domestic supply chains, expand existing manufacturing capabilities, and grow the economic contribution of the sector provincially and nationally. However, it poses multiple challenges to the sector and its supply chain including the need to adapt manufacturing processes, manage the fluctuating demand for components, and transition the workforce across industries and sectors. Industry stakeholders must also navigate the considerable uncertainties and risks of this transition.

This transition, and its significance to Quebec’s economy, is the focus of this comprehensive report which analyzes its impacts from 2025 to 2040, offering insights to policymakers and industry stakeholders on the potential economic and labour market implications. This report presents detailed analysis of the shift to EV production, particularly battery electric vehicles (BEVs). This involves careful review of the automotive and battery manufacturing supply chains, including the announced plans for new production operations and related changes reaching upstream to chemical manufacturing, mineral processing and mining potential. In addition, the analysis tracks the related decline in assembling ICEVs and the shrinking demand for their components, the parallel aspect of this transition. The timing and magnitude of new production and shifts in the supply chain have been set out in three scenarios that reflect the various potential future outcomes – from rapidly growing BEV production capabilities depicting a successful shift in production over the upcoming years, to a more gradual shift in vehicle production, accounting for the various risks and barriers to EV production and adoption. The EV production analysis estimates specific output and employment changes expected across the different stages of the supply chain.