Directions for Ottawa: Policy prescriptions for Canada’s electric-vehicle industry

Prime Minister Justin Trudeau stands in front of a Ford Mach-5 electric vehicle at the Ford Connectivity and Innovation Centre in Ottawa in October 2020.
Prime Minister Justin Trudeau stands in front of a Ford Mach-5 electric vehicle at the Ford Connectivity and Innovation Centre in Ottawa in October 2020. David Kawai/Bloomberg via Getty Images

This is the third in a series taking a deeper look at the landmark deal to bring electric vehicle production to Ontario. In the first installment, we reported on what the deal means for auto workers. In the second, we examined what it will take to realize dreams of a domestic EV industry.

Ottawa wants a strong domestic electric-vehicle (EV) industry, and it’s prepared to spend for it. The federal government has pledged $295 million to Ford’s $1.8-billion overhaul of its Ontario facilities to produce cleaner cars, and is reportedly negotiating a subsidy for Fiat Chrysler, as well. 

But incentives aren’t the only thing Canada will need to compete for EV production, and opportunities extend beyond the Detroit Three: plenty of researchers, startups and long-established firms are creating technology and products in this space.

Here’s what some industry executives and policy experts think Ottawa can do to help Canada’s EV industry get into gear.

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Buy local

“We could use procurement as a demand-driven policy to make sure that our startups, SMEs, or even companies who do R&D here have a market for these new products and services. If the government would say, ‘All my fleet will be [in] the next 10 years,’ that would make a difference. We have to work on the demand side, so that you build some scale. Once you have critical mass, then it’s great to export elsewhere in the world.” – Robert Asselin, senior vice-president of policy, Business Council of Canada

Set up a cooperation fund

“In Quebec, we have another company that is producing electric buses. We had discussions in the past with them. We realized that the voltage of our battery was at 600V, and the electric drivetrain of their bus was at 800V. That means my battery is not compatible with their electric platform. Both [companies] could have an advantage to work together to develop the internal market. But because it’s a small volume, for them it’s too expensive to modify their electric platform—and for me, it’s too expensive to modify my battery—to work together. If the government could help us [by] giving some money to help to merge the two platforms together, it could be very [beneficial]. This is what we need in Canada. Sometimes, [a] smaller company [has] issues to grow and make [a] deal with another Canadian company, because of some strategic development like this.” – Alain Vallée, general manager, Blue Solutions Canada

Encourage adoption

“It’s clear that [EVs are] direction that things are moving, but [they’re] still a relatively small component of overall vehicle purchases. First, as the technology develops and the price point comes down, it’s critical that there are incentives in place to make sure that these products are being purchased by consumers. Secondly, you need charging infrastructure, so that it’s convenient for a consumer. And then the third piece is educating people around what these products can do, what kind of range they have, how long they last, how you charge them.” – Brian Kingston, CEO, Canadian Vehicle Manufacturers’ Association

Seize the moment

“We are in a very special moment in history where there is still the possibility for new market entrants and for new regions to become globally recognized centres of excellence for clean technology research, innovation and manufacturing. [That includes] medium- and heavy-duty vehicle-manufacturing, parts, EV-charging equipment [and] networks. This window will close, so there is a global race to establish the expertise and the systems necessary to be a real credible player in that area. We’re fighting very hard to get globally competitive organizations, researchers and producers in Canada. Once advancements are made and scale is achieved, it will be much harder to be competitive in that industry.” – Travis Allan, vice-president of public affairs, AddÉnergie 

Focus on process innovation

“I was in a Mercedes plant in Germany a few years ago, and the technicians rode from workstation to workstation on bicycles. You could look down these long aisles of robots, and you might not see anyone, but all the sort of lights on the workstations were green. Wage advantages become less and less important. It’s all about how efficient [you can] make your production. When people think of innovation, they think of a new thing or a new widget or a new material. But in manufacturing, a great deal of the innovation is in the process—autonomous systems, different ways of monitoring to make production more and more efficient and higher quality. That is something that Canada has a real shot at, because it has a lot of people who work every day on process innovation. The education and work ethic [of] manufacturing workers in Canada, and all the engineering and science brain power that we have—that gives us a shot at all kinds of manufacturing, including auto, that wasn’t maybe available to us when wages were such a determining factor.” – Paul Boothe, former senior associate deputy minister, Industry Canada