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TORONTO — — The Ontario government will pump $650-million into the automotive sector to lure new investment focused on environmentally friendly technologies, sources say.
The announcement of a replacement for the $500-million Ontario Automotive Investment Strategy will be made by Premier Dalton McGuinty Tuesday morning at a General Motors of Canada Ltd. assembly plant in Oshawa.
The move comes amid growing public concern about the environment and climate change and follows a proposal in the federal budget in March to provide rebates for fuel-efficient vehicles and to tax gas-guzzlers. The federal proposal infuriated the province's auto makers, which employ more than 100,000 people in vehicle assembly and parts manufacturing, and generate hundreds of millions of dollars annually in tax revenue.
Tuesday's funding is the latest in a string of announcements by the McGuinty government aimed at tackling climate change before the Oct. 10 provincial election. Recent polls show climate change and health care top voters' concerns.
“Ontario will show leadership by partnering with industry to secure high-paying jobs and fight climate change,” a government source said.
Monday, Mr. McGuinty said Ontario will close its four remaining coal plants by 2014 to help the province slash its greenhouse-gas emissions by that year to 6 per cent below 1990 levels. This still falls short of Kyoto's goal of 2012.
Mr. McGuinty, who came under fire for backing off on the deadline of an earlier plan to shut down the coal-fired plants, says it will be more difficult to wriggle out of his latest promise because it will have the force of law.
He said the Ontario Power Authority, the agency created by his government to carry out the province's electricity planning, has said the province can close the coal plants by 2014 without compromising electricity reliability.
At the Shared Air Summit in Toronto Monday, Mr. McGuinty said closing the coal plants will take the province halfway toward its targets for slashing greenhouse gases. Another 30-per-cent reduction will come from investments in rapid transit, incentives for municipalities to reduce emissions and making cars more fuel-efficient.
Last week, the province unveiled an ambitious plan to spend $11.5-billion over 12 years on more than 50 rapid-transit projects in the Greater Toronto Area and Hamilton.
Both the Ontario Premier and Economic Development Minister Sandra Pupatello have signalled that a new automotive program would focus on the environment.
The new fund is aimed mainly at making cleaner large vehicles, not smaller cars and trucks. It is a successor to a $500-million Ontario program set up in 2004 that is credited with generating $7-billion in new auto investments.
The new program will focus more sharply on the environment and helping manufacturers develop technologies to improve fuel economy and reduce emissions. Some of these technologies are already in use in Ontario, such as displacement on demand, in which an eight-cylinder engine throttles back to six or four cylinders when cruising.
GM will begin assembling hybrid versions of its full-sized pickups in Oshawa next year, and later in the decade, Ford will make hybrid versions of the crossover vehicles it produces in Oakville.
“Not every aspect of every automotive investment is developing a fuel-cell vehicle,” one high-ranking industry source cautioned Monday.
