TORONTO -- The Canadian and Ontario governments have tapped a former top Toyota Motor Corp. executive to attract increased investment to their struggling auto sector.
Ray Tanguay, who was chairman of Toyota's Canadian operations until his retirement earlier this year, was named head of a new automotive investment committee intended to advise the governments on tax breaks and other financial incentives they can offer to lure new automotive plants and convince automakers to keep the ones they already have in Canada.
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"We have to do a better job showing there are better opportunities in Canada," Tanguay, an Ontario native, said at a news conference here. "We have to show you can have a better bottom line" in Canada.
Canada's Industry Minister James Moore and Ontario's Minister for Economic Development, Brad Duguid suggested their governments are willing to offer financial incentives, noting that Canada provided about $10 billion in assistance to GM, Chrysler and other auto makers during the financial crisis.
"Our policy is our track record," Moore said, without elaborating.
Tanguay already serves as chairman of the Canadian Automotive Partnership Council, a group that has been working to bring investment and production to the country.
In his new role, he'll use his industry contacts to be more active in identifying instances when automakers are considering expanding or downsizing Canadian plants, or are looking for a location for a new factory.
"We need better intelligence on when the investments are going to be made," Duguid said.
Canada was once the world's fourth largest auto-producing nation, but its auto sector has been shrinking due to high labor costs, a strong Canadian dollar and the government's reluctance to offer financial incentives to manufacturers.
Only one new auto plant has been built in Canada in the last 20 years -- Toyota's facility in Woodbridge, Ont., a project that Tanguay headed.
At the same time, a half dozen car plants have closed, and others have been downsized. GM this year will eliminate 1,000 jobs at one of its two plants in Oshawa.
Canada's struggles contrast with the southern U.S. states and Mexico, where nearly two dozen new auto plants have sprung up in the last two decades. Audi, Hyundai, BMW and Tanguay's former employer, Toyota, are on track to open new Mexican plants in the next few years.
Tennessee, South Carolina, Alabama and other U.S. states often provide tax breaks, infrastructure improvements and training services worth hundreds of millions of dollars to land new auto plants within their borders.
Canada boasts a skilled workforce and lower corporate taxes than the U.S. But the federal and provincial governments have hesitated to offer financial aid packages.
A year ago, Fiat Chrysler Automobiles sought aid in connection with a $2 billion upgrade of its minivan plant in Windsor, but became the focus of a public controversy when some politicians accused the company of seeking "corporate welfare."
In the end, FCA dropped its request and went ahead with its Windsor investment.
Tanguay joined Toyota in 1991, a time when the company had a three-year old plant in Cambridge that had 1,000 employees and made about 70,000 Corollas a year.
He became president of Toyota Motor Manufacturing Canada in 2002. Six years later, the company opened its Woodstock plant. The company now employs about 8,000 people and in 2014 assembled nearly 580,000 vehicles.