麻豆传媒

Prime Minister Justin Trudeau met with automakers in Japan Tuesday and asked them to consider building new assembly plants in Canada.

But one expert says it will be difficult for Canada just to keep its existing plants in operation.

Tony Faria, who oversees automotive research at the University of Windsor, told CTV鈥檚 Power Play that Canada has slipped from the world鈥檚 fourth-largest automotive assembling nation in the world to eleventh, and he expects further decline.

Canada has some assets that make it attractive to automakers, including a well-educated workforce, very productive plants and a competitive tax environment, according to Faria.

However, high production costs make it tough to compete with jurisdictions in the U.S. and Mexico, particularly when it comes to labour and electricity, Faria said.

Expensive electricity

All of Canada鈥檚 major auto assembly plants are in Ontario, where manufactures paid as much as $112.24 per megawatt hour for electricity in 2014.

That鈥檚 about double the cost of electricity in 15 mid-western states, which averaged $48.08, according to the

鈥淭he incoming cap and trade program and the refurbishment of Ontario鈥檚 nuclear power plants are also expected to place additional pressures on market costs,鈥� according to AMPCO.

High-cost labour

When it comes to labour costs, Faria points out that General Motors and Fiat-Chrysler have said they won鈥檛 announce decisions on whether they plan to keep plants in Ontario until their next agreements are signed with unions.

鈥淕eneral Motors is sending a very clear note that what may influence their investment will be future labour costs in Canada,鈥� he said. 鈥淔iat Chrysler has said about the same thing.鈥�

In the past two years, eight automakers have opened or announced new plants or expansions in Mexico, where workers costs about CAD$10 an hour, including wages and benefits, according to the Center for Automotive Research (CAR) in Michigan.

Costs in Canada are closer to $60 an hour, according to the union Unifor, which represents workers at Ford, General Motors and Fiat Chrysler plans in Ontario.

Even with a relatively low Canadian dollar, some U.S. states are cheaper than Canada too. For example, in Tennessee labour costs are about CAD$50 per hour, according to CAR.

However, auto expert Jeremy Cato pointed out on 麻豆传媒 Channel that costs are lower at Ontario鈥檚 non-unionized plants, such as those owned by Toyota and Honda, so he is hopeful Japanese firms will see Ontario as a good place to expand.

TPP in question

Faria said that the Trans-Pacific Partnership agreement -- which Japanese Prime Minister Shinzo Abe to ratify -- would be a win for large assemblers and big parts makers in Canada, who would gain access to new markets.

However, the Liberals have promised to review the deal before moving ahead, and U.S. presidential hopefuls, Republican Donald Trump and Democrat Hillary Clinton, have both expressed opposition to the 12-country trade deal that was spearheaded by Barack Obama.

And Unifor is actually fighting against TPP, arguing it will hurt Canadian automakers more than it will help, because reduced tariffs would open them to more competition from plants in Japan that have access to cheap parts from China.

Government 鈥榗ommitted鈥�

Minister of Innovation, Science and Economic Development Navdeep Bains told Power Play that the government is committed to maintaining and growing the auto sector, which he said employs 500,000 directly and indirectly.

Bains noted that he worked at Ford more than a decade ago, when the company convinced the Liberal government under Paul Martin to 鈥渕ake investments鈥� in the Oakville, Ont. plant.

鈥淚 understand what (automakers) are looking for,鈥� he said. 鈥淭hey鈥檙e looking for a government that understands the sector, that鈥檚 willing to be a partner.鈥�

Bains said that means 鈥渢ax incentives and programs and repayable contributions and grants鈥� such as the Automotive Innovation Fund, which was put in place by the Conservatives and extended by three years in the Liberal government鈥檚 2016 budget.

Cato, the auto expert, told 麻豆传媒 Channel that incentives are a must if Canada is going to beat out states like Tennessee and Georgia for new plants.

鈥淭hese jurisdiction in the U.S. south are not shy about handing out hundreds of millions of dollars to automakers to locate (there),鈥� Cato said.

Bains told Power Play that although the government must be 鈥渧ery thoughtful about the short-term implications鈥� of maintaining 鈥済ood quality jobs鈥� like those at GM, Ford and Chrysler, Canada also needs to 鈥減osition ourselves for the vehicles of tomorrow.鈥�

He gave the example of the Ottawa-based company QNX, which is currently that it hopes will integrate high-tech components in self-driving cars.

鈥淗ow do we leverage that?鈥� he said.

With files from The Associated Press