A Strong Canadian Auto Industry in a Fuel Efficient Future

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PublishedDecember 19, 2007

A commentary on automotive industry policy in the context of climate change, vehicle fuel efficiency regulations and carbon-constrained markets

Pollution Probe believes that Canada needs a long-term vision and strategy to build a strong and globally competitive auto sector for the future. The auto manufacturing industry in Canada is composed of vehicle assembly operations and component producers. Generally, these facilities supply foreign automotive markets, exporting mainly to the US, generating significant wealth for Canada. The consumer market for automobiles in Canada is mainly supplied with imported models, thus expanding choice for Canadians. The right mix of industry policies and consumer market policies could help create the conditions for the long-term success of Canada’s auto industry. A crucial element of this success will be the capacity for this industry to build products that are consistent with the goals of environmental and economic sustainability.

This commentary begins with a discussion of why fuel efficiency standards are needed and why governments around the world are implementing regulations. Aspects of the auto manufacturing industry and the consumer automobile market in Canada are then presented, followed by a discussion of how industry and market policies could be aligned to benefit the auto sector,
consumers and the environment.