What Glen Murray gets wrong about Ontario car makers

By Greig Mordue, Special to TVO.org - Published on May 12, 2016
cars on an robotic assembly line
The Ontario government is considering the idea of pushing for 1.7 million electric or hybrid vehicles on the road by 2024.

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Reversing climate change in Ontario is a wicked problem, and right now the Environment and Climate Change Minister Glen Murray is neck-deep.

Recently, Murray took aim at Ontario’s auto industry. A draft of the province's climate change action plan proposed a goal of 1.7 million electric and hybrid vehicles on Ontario’s roadways by 2024. At around the same time that became public, the minister also suggested that Ontario’s auto industry is “missing courageous leadership” if it doesn’t offer more electric vehicles.

In some ways, singling out automotive manufacturers is understandable. After all, cars and light trucks are responsible for about 12.5 per cent of all greenhouse gas emissions.

However, neither Murray’s vehicle target nor the comment on leadership are justified.

First, the target of 1.7 million electric or hybrid vehicles by 2024: Certainly, it is a big, bold goal. Perhaps the intent is to catalyze consumers, the industry and other policymakers into action. Unfortunately, it isn’t grounded in reality: 

  • 2024 is just eight years away. That means the government is counting on more than 200,000 electric or hybrid vehicles to be purchased annually starting next year; that’s about 30 per cent of the cars and trucks Ontarians buy. For reference, last year, electric and hybrid vehicles occupied only two per cent of the Canadian market.
  • Changes to vehicle models costs hundreds of millions of dollars and happen every five years or so. Powertrains for those vehicles get changed over about once every other model change; in other words, about once every 10 years. That means Murray is anticipating that this big changeover will occur in one fell swoop.
  • Ontario is a big market, but it’s not the only market. Ontario policymakers’ aspirations will not drive the research and product decisions of companies headquartered in Seoul, Detroit, Stuttgart or Tokyo, particularly when those aspirations are not realistic.
  • Ontario is part of a big, integrated North American market. About 90 per cent of the vehicles manufactured in this province are exported. A big, unique goal for Ontario will have little bearing on what vehicles actually get made here.

Next, Murray’s comment on leadership: Canada’s auto industry directly employs about 150,000 people, almost all of them in Ontario. Those jobs hinge on the capacity of the big auto assemblers located in the province – and their leadership – to advocate for Ontario, promote it to foreign headquarters, and make the case for new or renewed mandates. When that happens, opportunities are also created for Canada’s auto parts makers.

For the provincial government to suggest to the very people it’s trying to work with that they lack courage is, well, not very helpful. Ontario needs local leaders to sell the province to their head offices abroad. And local leaders need to be able to tell their global headquarters that Ontario is a welcoming, supportive place for making cars.  

So, what should Ontario policymakers be doing to position Ontario for the future?

For starters, they should not cling to the notion that Ontario, with less than one per cent of the global auto market and home to no automaker headquarters, will drive the product or research agenda.

Instead, on the manufacturing and investment front, they should work with the federal government (as they do already) to position Canada as an attractive and competitive partner. With no automakers headquartered in the country, Canada is always going to have to work harder to be seen and considered. That means governments must continually reinforce and demonstrate what has proven to be true:

  • Our infrastructure is competitive. 
  • Our tax system is competitive. 
  • Our people are as productive as they are anywhere in the world.
  • The manufacturing workforce here is better educated.
  • Access to research and technology is world-leading and cost-competitive. 

As for which vehicles we ultimately drive, those decisions will be – and should be – made by consumers, not policymakers. When policymakers ask themselves “what am I trying to do?” and the answer is “sell electric cars” the policy options are naturally going to be quite narrow. However, if Minister Murray were to step back and ask himself “what am I trying to achieve?” he might have a different response. His answer would probably be “reduce greenhouse gas emissions.”

That answer opens up a range of responses. It does not restrict him to focusing only on electric cars as the technology of the future. It raises possibilities for supporting all kinds of technological solutions that could be part of the answer to reducing emissions: things like using lighter materials in cars to make them more fuel-efficient, improved internal combustion engines or even fuel cell technology.

Climate change is a wicked problem. Wicked problems require complex solutions. By picking a single technology and doing so too early, Murray has reduced the likelihood that he will eventually be seen as the architect of Ontario’s climate change solution. Right now, what Ontario needs more than anything is to be flexible – open to the range of options that will continue to emerge.

Greig Mordue is the ArcelorMittal Dofasco Chair in Advanced Manufacturing Policy at McMaster University.

Update: This article's text was amended to clarify that the 1.7 million electric and hybrid cars by 2024 goal comes from a draft document and hasn't as yet been officially adopted by the provincial government.

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