Canada, Ontario Boost Auto Sector with C$2.5B Investment

Canada and Ontario have pledged an additional C$2.5 billion to support automotive capital projects over the next two years. This funding is part of a larger C$8.7 billion initiative aimed at assisting industries affected by U.S. tariffs.

The investment includes C$1.5 billion from the federal government and C$1 billion from Ontario. These funds will help manufacturers upgrade equipment and assembly lines to produce electric and connected vehicles.

A new Canada-Ontario Automotive Task Force will be established to coordinate efforts and guide the industry’s transition. This move aligns with the national goal of achieving a fully electric vehicle market by 2035, as outlined in the Auto Strategy unveiled in February 2026.

The strategy aims to transform domestic vehicle manufacturing, safeguard jobs, and position Canada as a leader in electric vehicle production. According to the government, the automotive sector employs over 120,000 people directly and contributes more than C$16 billion annually to the national GDP.

The broader C$8.7 billion program also includes a C$5.22 billion Joint Steel Action Fund and investments in road infrastructure for Northern Ontario’s critical minerals region. Prime Minister Mark Carney emphasized the plan’s focus on protecting jobs and building a stronger, more resilient economy.

By freezing light-duty vehicle greenhouse gas emissions standards at 2026 levels through the 2029 model year, the plan provides a temporary pause before annual increases resume in 2030.

Prime Minister Carney’s statement shows the cooperative nature of the initiative: “From mine to mill to assembly line, Canada and Ontario are protecting jobs today and making bold investments that will build a stronger, more resilient, more independent Canadian economy for tomorrow.”