Innovative. High-tech. Hungry for growth.

These are just three of the many positive terms that describe Canada’s automotive sector. Fundamental to Canada’s economic development, the industry supports tens of thousands of jobs in automotive production alone.

On September 9, 2021, the FOCAL Initiative hosted a webinar designed to document the current scale and future scope of Canada’s automotive industry.

The centrepiece of the webinar was a comprehensive presentation (a recording of that presentation can be viewed here). Supported by an extensive range of graphics, statistics and explanatory text, the presentation was designed to:

• Identify the breadth of the automotive sector
• Demonstrate its importance to the Canadian economy
• Illustrate how dynamic and technology-intensive it is

What follows is a snapshot of the report’s findings together with commentary and analysis of those findings made by some of the webinar’s distinguished presenters: Brian Kingston, President, Canadian Vehicles Manufacturing Association (CVMA); Dr. Charlotte Yates, President, University of Guelph and Kim Thiera, President & CEO, AceTronic Industrial Controls Inc. 

Some initial numbers

The Canadian automotive industry supports:

• 38,000 employees in vehicle assembly
• 80,000 employees in parts manufacturing
• 70,000 employees from other primary automotive suppliers

Additionally, Canada has an automotive technology footprint (derived from six technology clusters including Greater Toronto Hamilton Area, Kitchener/Waterloo, Ottawa, Windsor, Greater Montreal, Vancouver) of 29,000 employees. 

The economic impact

The considerable economic impact of these numbers is conveyed in the following two graphics. The first graphic summarizes the importance of automotive production in bringing value to Canada’s economy. The second graphic simulates the economic impact of a 20% increase in vehicle production or vehicle parts exports on the automotive manufacturing sector and subsequently, the Canadian economy. 

Supply and demand for key occupations

Central to the presentation’s findings involved an analysis of supply and demand statistics in 49 occupation groups, taking into account the large volume of retirees leaving the workforce.

Between 2021 and 2030, it is estimated that approximately 45,000 workers (largely but not exclusively in Ontario and Quebec) will need to be hired. Job categories covered will include such areas as assembly, management and engineering. On a percentage basis most opportunities will be in the skilled trades.

18 technical occupation groups critical to Canada’s technology sector were also examined. We project that over 100,000 additional positions will need to be filled between 2021 and 2030.

Trends in the automotive sector

As important as supply and demand occupational statistics are, the FOCAL Initiative has investigated several other automotive industry trends and issues during the past three years. These include, but are not limited to apprenticeship, gender diversity, wages, attitudes of youth, digitization and immigration.

While all these issues are vital, several stand out as being in need of urgent attention:

Gender diversity

Women – particularly young women – are underrepresented in the industry. Women account for 23% of the vehicle assembly work force and 25% in vehicle parts manufacturing.

Immigration

Immigrants are also underrepresented. Immigrants account for 23% of the vehicle assembly work force and 39% in vehicle parts manufacturing.

An important positive trend is that the percentage of immigrants working in the industry who have earned a university education has jumped from 12% (late 1980s) to 41% (2016).

Apprenticeship

Apprenticeship completion rates for the industrial trades in the industry are low. There are indications that many employers appear to be frustrated with the current apprenticeship system, which is not helping them cope with the challenges.

Youth

While youth wages in automotive manufacturing are above average compared to the overall Canadian economy, the youth segment have significant misperceptions about the automotive sector:

• 59% of youth workers think that jobs in automotive are not as secure as in other sectors
• Many believe that the work/life balance offered is inadequate
• Many are uninformed about, and therefore unimpressed with, career possibilities and the industrial apprenticeship programs the industry offers

Wages

Automotive manufacturing earnings have declined between 2001 and 2017 in both assembly and parts manufacturing – more so in the latter than the former.  While this may be due in large part to competitiveness factors, on the surface, it does not provide as positive an image as other sectors might.

A comparable decline in earnings has taken place in the US. According to CAR Group, that decline is 23%. 

Occupational impact of Industry 4.0

The automotive industry is not alone in being affected by the digitization of manufacturing, widely referred to as Industry 4.0. Industry 4.0 represents the fourth industrial revolution that has occurred in manufacturing during successive industrial revolutions.

• The first industrial revolution involved mechanization through water and steam power
• The second industrial revolution depended on the use of electricity to enable mass production through the creation of assembly lines
• The third industrial revolution was initiated by the advent of computers and automation
• The fourth industrial revolution is driven by the introduction of smart and autonomous systems fueled by big data and machine learning

The FOCAL Initiative has concluded that Industry 4.0 technologies will have significant but manageable impacts on Canada’s automotive sector:

• 80% of tasks performed by production occupations will be affected through the partial or full elimination of certain tasks
• 50% of skilled trade tasks will be equally affected
• The industry will also be impacted by the creation of new jobs and titles reflecting the increased requirements for digital skills

Impact of shift from manufacturing Internal Combustion Engine (ICE) Vehicles to Electric Vehicles (EV)

The well-documented shift away from Internal Combustion Engines to Electric Vehicles will also affect automotive manufacturing. For example, Canada currently has 64 automotive powertrain manufacturing facilities employing approximately 16,500 workers. Metal and tooling companies employ approximately 66,000 workers. FOCAL Initiative research has found that:

• 220 ICE vehicle parts suppliers (out of 850) will be impacted
• There will be significant impact on powertrain and transmission manufacturing facilities
• Some metal and tooling companies will also be impacted, but not all facilities and workers will be affected in the same ways by the shift

Panel Commentary & Discussion

At the conclusion of the webinar presentation, our three expert panellists – Brian Kingston, Dr. Charlotte Yates and Kim Thiera – were invited to comment on our overall findings.

All acknowledged the major transformation – largely, but not exclusively precipitated by Industry 4.0 – that the automotive sector is going through and all agreed that we need to accommodate and encourage:

• More diversity in the labour force, particularly among women
• More skilled trades recruitment
• More advanced mapping of future industry skills requirements

Of particular concern was the relative decline in earnings in the assembly and parts manufacturing segment of the industry which, when measured against the rising cost-of-living (especially housing), is making recruitment increasingly difficult.

Another area of concern is youth recruitment. One of the biggest challenges in promoting skilled trades to young Canadians involves the out-of-date stigma that working in the automotive industry implies a low-paying, unexciting, unsafe and demeaning job.

One specific recommendation from our panellists was that there is a powerful case for the creation of an Automotive Manufacturing Workforce Development Plan. 

Conclusion and next steps

This latter recommendation ties in with FOCAL’s on-going mission. There is considerably more work to be done. We have identified the size, dynamic nature, and importance of the automotive production and related technology sector – with a degree of comprehensiveness and clarity difficult to find from other industry sources.

We have forecast a large number of job openings in tight labour markets covering every automotive manufacturing region in the country – invaluable insights for both employers and potential employees alike. 

What’s ahead for FOCAL:

1. Further explore the economic & labour market implications of changing technologies and policies
2. Help employers recruit by developing occupational profiles and disseminating information to youth through social media marketing (where they are mostly engaged)
3. Help workers who lose jobs due to changes in the industry by developing tools to help them move to new careers
4. Keep labour market forecasts current as new data becomes available

Find out more from FOCAL

The Future of Canadian Automotive Labourforce (FOCAL) Initiative is a collaboration of the Canadian Skills Training and Employment Coalition (CSTEC), the Automotive Policy Research Centre and Prism Economics and Analysis. 

Funded by the Government of Canada, you can find out more about us on our website and follow us on Social Media – LinkedIn, Facebook, Instagram and Twitter – and through our newsletter.