The head of Magna International Inc., North America’s biggest auto-parts maker, said a currency around 80 U.S. cents and government incentives are key to Canada winning auto investment as policy makers intensify efforts to promote the industry.
“Having it at 80 cents and sort of staying in that area will make it more reasonable to attract investment here,” Don Walker, Magna chief executive officer, told reporters after a press conference in Toronto where the governments of Ontario and Canada struck a committee to court auto investment. “It certainly helps make the business case for the carmakers.”
Canada has seen its share of North American car production dwindle over the past decade as a currency that rose to near par with its U.S. peer spurred companies to cheaper locations in Mexico and the U.S., which provided further inducements through subsidies and tax breaks.
Over the last two and a half years the Canadian dollar, known as the loonie, has fallen almost 20 percent from parity to 81 U.S. cents today. One U.S. dollar bought C$1.2344 at 3:39 a.m. in Toronto.
Walker said firms would have to become convinced the loonie will stay where it is to build new plants in Canada, but government incentives similar to what other jurisdictions have offered could also help.
Ontario’s new auto investment committee will be led by Ray Tanguay, former chairman of Toyota Motor Corp.’s Canadian operations, and be comprised of executives of the major auto companies that have operations in Ontario, including Ford Motor Co., General Motors Co., Fiat Chrysler Automobiles NV and Honda Motor Co.
Incentives to automakers are one possible way to win investment, Tanguay told reporters after the press conference.