August 25th, 2015
The Canadian automotive industry produces an impressive range of light-duty vehicles, such as cars, vans, and pickup trucks. They also produce heavy-duty vehicles such as buses and military vehicles, while constructing the relevant parts, components, and systems required for these various vehicles. Beyond manufacturing, the industry draws upon a well-established network of dealers and aftermarket organizations that together form world-class distribution systems and providers of services.
The industry was not always successful, however. During the 2008 economic recession, the Conservative government created a fund to help bail out the struggling automotive industry. The intention of this fund is to create a long-term investment in the industry. While the industry still has its fair share of struggles, the current falling dollar serves as a boon to the automotive sector overall.
Government funding for automotive businesses remains a priority for the Harper administration. They specifically represent this attitude through the Automotive Supplier Innovation Program, or ASIP. It is no secret that the automotive industry is one of the world’s most competitive, with offshore and outsourced parts—and even entire vehicles—making profitability difficult. ASIP helps automotive companies remain on the cutting edge of product development and innovation as they grow their businesses and help keep and create new jobs for Canadians in Canada.
One of the most important aspects of Canada’s automotive industry is its network of excellent suppliers. The industry is already highly dynamic, but it needs to become even better to face the growing challenges in years to come from external offshore automotive companies.
The ASIP helps suppliers in the automotive sector meet growing demand to help them succeed in both local and global marketplaces. This includes innovations in areas such as fuel efficiency and emission and safety standards, all the while responding to growing consumer demand for automated vehicle technologies.
ASIP operates alongside other government funding initiatives by strengthening Canada’s parts supply base. Doing so generates ideal conditions for automotive research and development, while providing firms across the supply chain with they tools they require to become global competitors.
Funding from ASIP positions Canadian automotive suppliers, especially of a small or medium size, to create the products of the world’s automotive future.
How Much Funding is Available?
The Conservatives are well invested in this strategy, promising CAD $100 million towards automotive suppliers over the next five years. This significant investment helps ensure that good ideas transition from ideas to realities. Far too often there is an excessive gap between early-stage research and pre-commercial development. ASIP limits this gap, encouraging and fostering products towards commercial success.
Eligible activities include developing prototypes, process engineering, and pre-commercial product testing/validation. Of the $100 million, eligible companies can receive up to $10 million over the duration of the five-year program.
Canada’s automotive industry currently provides CAD $24 billion in exports on a yearly basis, while employing more than of 65,000 people. The current regime continues to dedicate government funding for businesses across the automotive sector, from research and development to suppliers to producers. By doing so, they choose to invest in a vibrant future for the Canadian automotive manufacturing industry. The Automotive Supplier Innovation Program helps the sector by creating high value innovation while securing and generating new jobs in the process. This in turn helps the sector remain competitive not only in the domestic market, but also on a global scale.
For INAC’s bulletin on this program, please click here.