A seismic shift is underway in Canada’s automotive landscape, and a new analysis is urging the federal government to actively champion companies demonstrating a true commitment to the nation’s industry.
For the past decade, a clear divergence has emerged: while American automakers have steadily reduced their Canadian operations, Japanese manufacturers have maintained consistent production and employment levels. This isn’t a subtle change; it’s a fundamental reshaping of the industry’s core.
By the close of 2024, Toyota and Honda collectively accounted for a remarkable 60 percent of all assembly plant employment in Canada, a significant leap from approximately 40 percent in 2015. Their dominance in production is even more pronounced, with 77 percent of all vehicles assembled in Canada in 2025 originating from these two Japanese giants, compared to just 44 percent a decade prior.
The fluctuations within the American automotive sector have been particularly striking. Ford’s Oakville, Ontario plant, initially slated for electric vehicle production in 2025, saw those plans delayed, then altered again to focus on gasoline-powered pickup trucks. This constant recalibration reflects a broader uncertainty.
Recent decisions by U.S.-based automakers, influenced by shifts in American policy regarding electric vehicle adoption and import tariffs, have led to significant changes. General Motors shuttered its Ingersoll, Ontario plant, halting production of its BrightDrop EV delivery van, and recently cut a third shift at its Oshawa facility.
Stellantis, too, has reshuffled its production plans, moving work intended for its Brampton, Ontario plant to the United States, casting a shadow over the plant’s future. However, a positive note emerged with the addition of a third shift at its Windsor, Ontario location.
While the Detroit Three maintain a substantial overall footprint in Canada, including engine plants, research facilities, and a battery plant, productivity in their finished vehicle production has demonstrably declined. Conversely, Japanese automakers are leading the way in efficiency and output.
The analysis highlights a critical point: frequent plant shutdowns and underutilization within the American sector have resulted in prolonged layoffs, a stark contrast to the stability offered by Japanese manufacturers. This difference underscores the importance of consistent investment and long-term vision.
As Ottawa prepares to unveil its new automotive strategy, the report strongly advocates for incentivizing companies that have consistently invested in and expanded their Canadian presence. It also emphasizes the need to promote the adoption of Canadian-made production technologies.
Canada’s substantial vehicle market – approximately 1.9 million vehicles purchased annually – represents a powerful lever for securing further automotive investment. However, domestic production currently lags behind demand, with only 1.2 million vehicles produced last year, a significant drop from the 2.3 million produced in 2016.
The federal government is already taking steps to attract more automotive production to Canada, recently signing a memorandum of understanding with South Korea to encourage Korean automotive investment. In 2024, South Korean automakers accounted for 12 percent of all vehicles sold in Canada.
A similar agreement with China aims to bring 49,000 electric vehicles into Canada at reduced tariffs, with the expectation of reciprocal investment from Chinese companies. These initiatives signal a proactive approach to diversifying and strengthening Canada’s automotive sector.
The analysis from Trillium Network for Advanced Manufacturing welcomes the forthcoming strategy, urging policymakers to base their decisions on the current realities of the industry, acknowledging the profound changes that have already taken place.
The recent cut of a shift at GM’s Oshawa plant, impacting at least 1,000 workers, serves as a stark reminder of the stakes involved. Simultaneously, data suggests Canadians are increasingly prioritizing practicality over luxury, further influencing the types of vehicles being produced and demanded.
