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Tariff threats are already driving investment out of Canada (www.cbc.ca)
submitted 3 days ago by HellsBelle@sh.itjust.works to c/canada@lemmy.ca
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"Whether or not they ever be put into place, the damage is done," said Greig Mordue, a former auto industry executive and associate professor at the W. Booth School of Engineering Practice and Technology at McMaster University.

He says Trump's threats have already changed the landscape. Whether he goes ahead with the tariffs or not, or whether he carves out specific exemptions, the threat alone will drive investment out of Canada and into the U.S.

"For at least the next four years, there will be no serious investment in the Canadian automotive industry," said Mordue.

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[-] avidamoeba@lemmy.ca 28 points 3 days ago* (last edited 3 days ago)

Keep in mind that we don't need private investment to do anything. We can always replace any amount of private investment with public. We cannot run out of Canadian dollars so financial capital is never a limiting factor unless we are ideologically opposed to public investment. Real economic resources such as people, materials, factories, know-how and so on are the limit and those haven't changed much. Talk about fleeting financial capital presumes the primacy of private capital. This position is purely ideological. Canada itself has a history of relying on public investment to build the country and its services in the form of crown corporations, many of which got privatized with the ideological shift in the neoliberal era. Nothing except this entrenched ideology is stopping us from doing that again.

[-] Dearche@lemmy.ca 5 points 2 days ago

A nice little addition is that we control most of the raw resources that goes into producing almost everything we need in the first place, so a weakened dollar due to borrowing and printing for the sake of massive public investments into our own industries actually makes us more competitive on the world market, especially for high end manufacturing or low and medium end that has very little labour input.

And such build-up will benefit the country massively in the long term as well, presuming that we're not neglectful in keeping them up to date as technology moves on. Not to mention all the employment opportunities this brings.

Canada is a superpower when it comes to energy, minerals, lumber, and agriculture. Not to mention that we've done surprisingly little in value added production of our raw resources, especially for selling oil without refining any of it. And delivering to the world market is easy, thanks to the build-up of the St Lawrence over the previous century, as well as BC's harbours.

[-] CanadaPlus@lemmy.sdf.org 3 points 2 days ago

Real economic resources such as people, materials, factories, know-how and so on are the limit and those haven’t changed much.

Yes but, well basically that. The government doesn't have all that shit, and is so stripped to the bone they can't even fund a website without getting conned by their contractors.

This is a reason the dip is self-limiting, and we shouldn't completely panic. This isn't a reason to go full Mao.

[-] avidamoeba@lemmy.ca 5 points 2 days ago* (last edited 2 days ago)

When I refer to us having those resources, I'm referring to the overall Canadian economy, not whether the government alone has them. If the money that mobilize those resources (e.g. someone from the Bay area paying me to do work) goes away and to a different country, the Canadian government can replace that money and get me to do work, directly or indirectly. For example building some of them gov't websites. Or working for some startup that got public funding. Among other possibilities.

[-] CanadaPlus@lemmy.sdf.org 1 points 2 days ago* (last edited 2 days ago)

Yes, I did get that. But when you start talking about public funding as a substitute for private, of course that's the government.

If you did mean going full Mao, you need to make it clear what that actually even means. Modern industrial economies are too complicated to just manually run, and historical alternatives have been suspiciously like a market with a lot of extra steps.

If you just meant emergency short-term stopgap programs, sure, they could and probably will do something like that.

It's Lemmy, so I can't actually tell.

[-] avidamoeba@lemmy.ca 1 points 2 days ago* (last edited 2 days ago)

Not sure where you're getting full Mao from, you mentioned it not me. I explicitly referenced Canada's history (and present) of running crown corporations. Besides that I was talking about replacing private dollars with public dollars. Canada's government has always done public investment in all sorts of firms. It can simply do more to offset missing private investment, instead of enduring the economic shock due to the unemployment resultant from the missing private dollars. Or it could fund building future firms (public or private) if private investment considers that too risky. For example think of public investment instead of venture capital funding startups.

On a separate note, speaking of public investment and crown corporations, a great way to make ourselves more efficient is to put common infrastructure (things that most need) under crown corporations which provide it at cost. We already do a lot of that but we've also privatized a lot of it since the late 80s. E.g. we no longer have public rail. Instead, everyone who ships products has to pay for the significant profits CN Rail makes. These days telecommunications is another example that would benefit everyone if provided at cost. Housing... Reducing all of these costs means lower costs for most other business activity.

[-] CanadaPlus@lemmy.sdf.org 2 points 1 day ago* (last edited 1 day ago)

Not sure where you’re getting full Mao from

On Lemmy, it's as likely as not that's what's meant. No hate intended in either direction - this is the internet, we can talk about whatever.

It can simply do more to offset missing private investment, instead of enduring the economic shock due to the unemployment resultant from the missing private dollars.

Ah, so you just mean subsidies. Yes, we can do that up to a point, but the thing is you have to fund it somehow. More taxes or a higher debt load actually scare those investment dollars right off again, so at very high levels it becomes counterproductive.

In reality, it's not all going to go away anyway. Like you said, Canada is full of good stuff. That puts a natural floor on how much business will actually leave.

On a separate note, speaking of public investment and crown corporations, a great way to make ourselves more efficient is to put common infrastructure (things that most need) under crown corporations which provide it at cost.

Yes, there is a strong argument that makes sense for anything that suffers from the network effect - American social media platforms are also very relevant to what's going on. Some things are provided below cost right now as well. Free roads and waste disposal have been blamed for too many cars and too much packaging.

[-] Sicsurfer@lemmy.ca 2 points 2 days ago

Mao isn’t the definition of socialism, which is what OP is talking about. Think the Nordic countries for a quality example on socialism, or early Canada. Communism is always defined by the dictators by people who have no understanding of communism

[-] CanadaPlus@lemmy.sdf.org 1 points 1 day ago* (last edited 1 day ago)

If you go on to .ml or Hexbear, they'll straighten you out about Norway being socialist really fast. They're not right necessarily, since words mean whatever we make them, but they're around and their definition is actually the older one.

Communism is always defined by the dictators by people who have no understanding of communism

However, people who call themselves "communist" as opposed to just "socialist" are definitely not aiming for Norway, in my experience.

[-] wirebeads@lemmy.ca 21 points 3 days ago

So are we able to get business to turn those existing plants into plants that can build Asian or European cars over here? Might be an opportunity there, or not. Perhaps we need to do what China did and start to build our cars for our own people.

[-] HellsBelle@sh.itjust.works 15 points 3 days ago

We already have a Canadian-made EV in the works.

https://www.projectarrow.ca/

[-] Sturgist@lemmy.ca 13 points 3 days ago

That's awesome 👍

Personally, I think it has the same issue loads of other current EV offerings have. It's trying too hard to look futuristic. Which, again this my personal opinion on what I want in a vehicle, that type of look is just bad. I really hate it. It looks like something a highschool student designed as their first CAD project.
Again, personal preference for car design, not trying to start an argument.

I think it's really important that Canada starts building up our own brands again. We used to have a bunch, they all got bought by American companies. We need to have our own brands.....

[-] Snowpix@lemmy.ca 4 points 2 days ago

I agree. I personally can't stand all of the futuristic designs, they all look like giant metal blobs that barely resemble a car. Too much emphasis on ugly headlights and taillights as well. I would LOVE an EV that just looks like a regular sedan. I doubt most of these "futuristic" designs will age very well.

[-] Grimpen@lemmy.ca 3 points 1 day ago

I'm less offended by the overall designs than the pointless gimmicks. Pet peeve is those flat door handles. What's wrong with boring old regular handles?

So many EV's are designed as luxury vehicles mostly. We need more Chevy Bolt and less Tesla.

[-] Auli@lemmy.ca 4 points 3 days ago

Anything about production? I couldn't see it and it's their second one? Just a concept car it seems.

[-] CanadaPlus@lemmy.sdf.org 1 points 2 days ago* (last edited 2 days ago)

I haven't seen anything about actual production - the original car seemed like just a promotion - but you have to think if there's suddenly tons of car parts coming off the line and nobody to buy them this would be a quick, already worked out way to fix that.

[-] HellsBelle@sh.itjust.works 2 points 3 days ago

Yes it's a concept vehicle ... in the works.

[-] ImplyingImplications@lemmy.ca 10 points 3 days ago

The government seems to be wanting to foster a domestic EV battery production industry. Might as well make entire cars while we're at it.

[-] BCsven@lemmy.ca 4 points 3 days ago

They could. For example the Chrysler plant many years back switched to running Volkswagen also. But would other brands come here is the question

[-] GrindingGears@lemmy.ca 3 points 3 days ago

I doubt it would make sense, as our marketplace isn't large enough to support it alone. You would only do this to give you more access to the North American marketplace.

[-] ragepaw@lemmy.ca 4 points 2 days ago* (last edited 2 days ago)

I keep seeing this talking point. Is it true?

Consider that Australia has a similar population, similar geographic issues and they have domestic auto production.

South Korea is only slightly larger than us in terms of population and has 3 domestic companies building cars. We could certainly do like Korea and export vehicles.

The only thing stopping us from having a Canadian domestic auto industry is the pervasive and false belief that we can't because we need to sell to the US.

We don't. We can sell to anyone willing to buy.

Edit: To add. My first new car was built by an independent plant that manufactured for multiple car companies.

[-] GrindingGears@lemmy.ca 1 points 2 days ago* (last edited 2 days ago)

Australia had automotive production. They don't anymore, because it wasn't viable.

South Korea is definitely an exporter of automobiles. Thing is it took them about ~40 years to get to the point where they caught traction with it. The early Korean exports were pretty low quality and sort of unreliable (different people had different experiences). It took time for their R&D to work it out, and for economies of scale to develop.

It's not the belief that we need to sell to the United States that would be stopping us here. It's that they are right next door + 100 years ahead of us on R&D and progress, not to mention having long established integrated facilities and economies of scale. You'd have to enter the global marketplace with a car company built from scratch, that would need billions if not even maybe hundreds of billions dumped into R&D, design & development, which takes time. You would need manufacturing facilities that would be huge, that would also probably cost tens if not hundreds of billions to develop. Where is your steel going to come from? How are you going to stamp it? Where's all the parts coming from if you don't want to work with the US, and then how are you going to get them on a timely basis if they are coming by ship? Not to mention the zillion other questions one would need to figure out. It would take ~a decade to get this all sorted out. And godless sums of money. All to then compete in a global marketplace with international companies that have centuries of experience.

Magna would be the only developed enough option where this could even be feasible, but even they've sort of poked around looking at developing a product in the past, and the absence of said product in the marketplace kind of tells you everything you need to know about the viability of it.

[-] CanadaPlus@lemmy.sdf.org 2 points 2 days ago* (last edited 2 days ago)

According to the wiki they still have a plant, but yeah, it shrank over the decades. Then again, other Aussie industries expanded to take it's place.

We're not trying to build this from scratch, and we only need to guarantee continued operation for the near future, not forever. I don't think it's a totally straight comparison.

It’s that they are right next door + 100 years ahead of us on R&D and progress, not to mention having long established integrated facilities and economies of scale.

Both of those things are equally in Canada, and I'm surprised you don't know that given the current news cycle.

Where is your steel going to come from?

We're a big net exporter of that, too!

and the absence of said product in the marketplace kind of tells you everything you need to know about the viability of it.

That's because crossing the border has been free and was assumed to always be free, so it's integrated with the US. American cars are Canadian cars, basically. Now that's changed, and the market (and politics) will have to adapt.

Organising a new company would be a huge problem, and selling overseas even bigger, but we have all the pieces on the production end.

[-] GrindingGears@lemmy.ca 1 points 2 days ago

No doubt we have a lot of production capabilities, and you are right, I'm sure you could piece most of the rest together. The marketplace is the biggest conundrum, I would propose. All those manufacturing facilities are in SW Ontario, so the only way to get them to other markets (which is going to be necessary here, because the Canadian marketplace isn't big enough), it is going to involve ocean liners. Which is feasible, but your margins are going to get cooked here. There's too much risk.

This ain't the industry Canada needs to double down on, in a suddenly protectionist world. It's natural resources, and maybe service related. And hopefully all sorts of other industries that we aren't even thinking about.

[-] CanadaPlus@lemmy.sdf.org 1 points 1 day ago

Yes, in the long term it might make more sense to just let Europe, South Korea and Japan take the lead. Or a poor country - hopefully a democratic one; I trust China only slightly more than the US right now.

The reason intervention would make sense is just to make the transition tolerably gradual. Right now we're talking about production lines and parts companies just sitting and rotting for (sudden, artificial) lack of customers, while Canadian consumers have trouble buying new cars at the same time.

[-] lobut@lemmy.ca 2 points 2 days ago

I know you were using hyperbole with 100 years of R&D and progress so for fun I wanted to know how old the modern car is and wikipedia said: https://en.wikipedia.org/wiki/History_of_the_automobile#%3A%7E%3Atext=Benz+was+granted+a+patent%2Cwas+capable+of+extended+travel. 1886.

So like, 139 years of automotive history and being 100 years behind would really suck lol.

In all seriousness, you raise very real points and links to globalisation and Pierre Trudeau's analogy of sleeping with an elephant has never been more real. I'm not gonna lie, I'm worried.

[-] GrindingGears@lemmy.ca 2 points 2 days ago

I'm worried too. I was born and raised in SW Ontario, so most of my family and friends work in some sort of auto manufacturing or automotive-related industry. It's already been pretty bad the past decade or so, this will likely be the death knell if it grows legs.

Fun fact, did you know that there was actually even electric cars made in the late 1800s? Some even in Canada. Car companies in this era all eventually failed though, or merged into other companies. There wasn't ever really any production volumes in auto until Oldsmobile and Ford came onto the scene, especially with the latter who established the golden standard of auto production lines.

[-] CanadaPlus@lemmy.sdf.org 2 points 2 days ago* (last edited 2 days ago)

Yeah, but we have history and old blueprints and universities full of people who know how to make good cars. And an existing advanced auto industry (just integrated with the US). OP was just guessing at a lot of things, and missed the mark quite a bit.

[-] GrindingGears@lemmy.ca 1 points 2 days ago

I wasn't guessing. I cut my teeth in automotive. I have an education in automotive engineering, amongst other things, and I have extensive working experience at both the retailer, and Tier 1 and 2 manufacturing experience earlier in my career. Not proclaiming to be the end all be all, or the smartest person in the world, or that I know much of anything, but I'm also far from being the village idiot on this topic.

It ain't happening bud, I'm sorry. There's not enough marketplace to recover the costs, it would be complicated to transport finished goods to other markets, especially considering that most of the manufacturing facilities are located in southern Ontario. Which means you'd have to pretty much stick everything on a ship, and that adds costs, versus trucking to the states. It obviously can be done, easily enough, but it cuts into margins at higher production levels. Margins aren't high in this industry, and the labour is mostly unionized, or very quickly will be if it's not, and that adds a dearth of costs. Volatility in commodities pricing alone would be enough to knock something like this into non-profitable territory. It likely wouldn't be profitable for a decade either. Even look at something like Tesla, it took them 17 years to turn a profit, and it actually doesn't really turn a profit from its cars, it's actually from the sale of environmental credits.

If you are going to see any automotive investment and new OEMs, something like a new Tesla or whatever, it's almost certainly going to be in Europe, not North America. Donald Trump has all but guaranteed that there's not going to be one dime spent in deepening or expanding automotive manufacturing capabilities spent here, for quite a while, likely a decade or more if he keeps it up. Canada has learned its lesson here, and I would imagine if anything happens in the automotive sector, it'll be a contraction, not an expansion. Even as close as four of five months ago, there have been new plans launched for factory expansion and construction of tier 1 suppliers in Southwestern Ontario, but I would bet you that'll be off now. We'll have to wait and see though, only those closest to the projects will know, and nobody else's crystal ball can predict the future.

And let's not even begin to consider that China is foaming at the mouth to dump mostly state backed, very viable electric cars here, for a fraction of the price tag that we've been paying. We aren't going to be able to block that off forever, they'll find a way around the tariffs eventually. How are you going to compete with that?

[-] CanadaPlus@lemmy.sdf.org 1 points 1 day ago

I wasn’t guessing. I cut my teeth in automotive. I have an education in automotive engineering, amongst other things, and I have extensive working experience at both the retailer, and Tier 1 and 2 manufacturing experience earlier in my career. Not proclaiming to be the end all be all, or the smartest person in the world, or that I know much of anything, but I’m also far from being the village idiot on this topic.

I'm sorry then. What I read there is that Canada doesn't already have an auto industry, and if that had been what you meant, that could only be a guess.

I'll respond to the rest on the thread with just you.

[-] cyborganism@lemmy.ca 9 points 2 days ago

I don't know if I'd be mad if the auto industry crashed. Maybe that would incentivise our government to invest in more mass transit infrastructure.

[-] Dearche@lemmy.ca 6 points 2 days ago

I think the crash is inevitable. Auto sales has plummeted in the western world as people are driving less due to having less money to pay for it. Not to mention that so many eastern countries are building auto factories that can sell equal quality cars at a fraction of the price, it's hard to see any future in the industry even if all this never happened.

We need to move on from auto manufacturing to some sort of higher tech product that is harder to brute force with cheap labour.

[-] cyborganism@lemmy.ca 4 points 2 days ago

How about just mass transit? Publicly funded projects with special policies that enforce the construction of the vehicles locally.

[-] Dearche@lemmy.ca 4 points 2 days ago

To be honest, alternatives to cars is the solution to most issues that have to do with roads in cities. Public transit handles thousands of times the capacity possible via cars. A single bus when things are slow still is more than a dozen times more effecient at using road space, not to mention all the costs involved, including gas, insurance, road maintenance, etc. During rush hour, a single bus can do the same work a hundred cars easy.

Not to mention trains and street cars, as well as bikes and just plain being able to walk around by just having functional side walks that don't get blocked off at the smallest little thing.

[-] CanadaPlus@lemmy.sdf.org 4 points 2 days ago* (last edited 2 days ago)

In the short term, we'd still buy cars, just from somewhere else. In the long term, to exaggerate a bit, yeah, poor countries have tons of dababs everywhere.

[-] cyborganism@lemmy.ca 1 points 2 days ago

lol "dababs" that's the first time I see that term.

[-] CanadaPlus@lemmy.sdf.org 2 points 1 day ago

Yeah, a standard English name doesn't exist AFAIK.

It's a vehicle of some kind that only sets off once it's full of passengers, basically. If that sounds like it would fuck all schedules it does, but expecting someone to show up in a 15 minute interval is very much not how it works in, for example, rural Africa.

this post was submitted on 16 Feb 2025
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