TORONTO -- Ontario, worried it is losing ground to other regions in the vital automotive industry, plans to pick up the pace to compete for investment dollars, but cash subsidies are unlikely to feature prominently in its strategy.
The auto industry drives the province's economic engine, with the sector and related industries employing one in seven Canadians, according to an industry group.
"We have to be in the game, and in order to be in the game seeking new investment, we better make ourselves heard out there," Joseph Cordiano, Ontario's economic development and trade minister, said in an interview.
"In the absence of any voices that are heard, then people begin to forget about you. There are 1,200 jurisdictions that are chasing investments around the world, a startling number."
The auto industry is the country's biggest exporter, accounting for roughly a quarter of total Canadian exports. But a report this week indicated Canada had no new major auto investment announcements in the second half of 2003.
Cordiano said the province will soon announce that it will make "strategic investments" in the auto industry that relate to training, research and development and public infrastructure.
"That sort of thing is where we can have an impact," he said. "We want to keep (the auto sector) at the forefront in terms of attracting investment and being as competitive as we can in terms of vying for that investment."
While no new plants have been built in Ontario since 1989, automakers and parts suppliers have poured billions into operations.
But industry players worry the sector will become static and even existing facilities may fall victim to the lure of competing regions in places like the southern United States and Mexico, among others.
The potential transformation of Ford Motor Co.'s Oakville assembly plant into a flexible manufacturing factory that can make multiple models is an example.
Ford Canada chief executive Alain Batty said the automaker is not far from a decision on whether to invest in the Oakville plant or another location but said provincial and federal government help is vital.
"Frankly, we don't see that we can win that investment without the support from these two levels of government," he said in an interview at the Canadian International Auto Show, which kicked off Friday.
Cordiano said "everything's on the table in terms of consideration" when it came to discussions about Oakville.
Industry watchers said Ontario should build on its strengths -- decent costs, skilled work force, strong infrastructure -- with tangible incentives instead of simply marketing Ontario as a good place to do business.
"We don't need to be even close to the kind of funding that the southern U.S., is but we do need to put something on the table that brings us up to a level," Gerry Fedchun, president of the Automotive Parts Manufacturers Association, said.
Industry groups have long called for changes to the tax regime to support things like research and training as well as investment to ease congestion at border crossings. With other regions forking over subsidies, money would not hurt either.
"I think the governments have made it clear that cold cash, like they have been offering in the southern (U.S.) states is not possible here," said Mark Nantais, head of the Canadian Vehicle Manufacturers Association, adding that Ontario should take a look at what other regions had on offer, such as tax policies.
"We have to create not comparability in terms of those tax regimes but we need to have an edge, a winning edge that allows us to attract that new investment."
Stephen Beatty, managing director of Toyota Motor Co.'s Canadian arm, said incentives alone rarely determined where a new plant would go unless it came down to the wire.
"If three locations were identical because they were equally proximate to the customer and your suppliers, because the skills were the same, because land costs were the same, then obviously anything that tips the balance is an important factor," he said.
Toyota has one plant near completion in Mexico and plans to build its sixth North American facility in Texas.