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Employees' vehicles it in the lot at the Ford assembly plant in Oakville, Ont., on March 19, 2020.

Nathan Denette/The Canadian Press

The federal and Ontario governments promised Thursday to pour hundreds of millions of dollars into an auto plant for the mass production of electric vehicles and the batteries that power them – a plan they said would help the country’s automotive industry stay competitive and recover from the COVID-19 pandemic.

Ottawa and the province said they will each chip in $295-million to support production at Ford Motor Co.'s plant in Oakville, Ont. The funding is part of a three-year agreement worth nearly $2-billion that was announced last month between the automaker and Unifor, the union that represents auto-industry workers in Canada.

Prime Minister Justin Trudeau and Premier Doug Ford called the joint investment an important step in building the next generation of Canada’s auto industry as it increasingly shifts toward less-polluting technologies.

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Prime Minister Justin Trudeau and Ontario Premier Doug Ford say their governments are each chipping in more than $250 million to mass produce electric vehicles — and the batteries that power them — at Ford Motor Co.'s plant in Oakville, Ont. The Canadian Press

The agreement will have a significant impact on the industry’s supply chain, including auto parts suppliers in the region, Mr. Trudeau said from the company’s connectivity and innovation centre in the Ottawa suburb of Kanata.

It will also secure 5,000 jobs throughout the automotive industry at a time when the COVID-19 pandemic has prompted workers everywhere to worry about their livelihood, he said.

“The market for electric vehicles will grow in the future and Canada has the talent to be a global leader in making batteries for electric vehicles, for electrification and clean technologies,” the Prime Minister said. “For our auto sector, for our environment, this is a win-win.”

The Premier, who spoke at the Oakville plant with representatives of Ford Motor and the union, said the deal “marks a new chapter” for Ontario’s auto industry.

“We’re laying the groundwork for the long-term recovery and prosperity of our province,” Mr. Ford said.

The Oakville plant employs 3,400 Ford Motor workers and Unifor president Jerry Dias has said retooling the plant to produce electric vehicles will save 3,000 of those jobs.

From the Liberal government’s perspective, the investment will not only help secure good-paying jobs in the struggling auto sector, but also give Canada an edge in the global competition to meet what’s expected to be explosive demand for electric vehicles in the near future.

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The Prime Minister acknowledged the comparatively high price of zero-emission and battery-powered vehicles can play a role in motorists' purchasing decisions, and urged provincial governments to “do their part” to provide incentives for consumers to switch from traditional gasoline-powered cars. A $5,000 federal rebate was introduced last spring.

Sales of electric vehicles dropped dramatically in Ontario in the first half of 2019 after the provincial Progressive Conservative government cancelled a rebate for their purchase, according to data released in December by Electric Mobility Canada.

Under the previous Liberal government, Ontario had offered up to $14,000 back for buyers of electric vehicles, but the Progressive Conservative government eliminated the rebate after taking power in 2018, saying the money was going to people who could already afford expensive cars.

Asked whether Thursday’s announcement signalled a shift in the province’s stand on renewable-energy initiatives, Mr. Ford said his government is a “strong believer in the electrical cars.”

Some Ontario legislators called on Mr. Ford to do more to promote cleaner energy even as they welcomed Thursday’s announcement.

“When the Premier came to power, he did everything he could to deter electric vehicles, from cancelling EV rebates to ripping chargers from GO stations,” Green Party Leader Mike Schreiner said in a statement.

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“These backwards decisions should be reversed to encourage more job creators to set up shop in Ontario and help drivers make the switch.”

The funding announcement is also part of the Ottawa’s commitment to invest in the transition to a cleaner, renewable-energy economy, with the goal of reaching net-zero carbon emissions by 2050.

It has already committed more than $300-million to create a network of fast-charging stations for electric vehicles across the country. And it is providing incentives of up to $5,000 off the price of purchasing or leasing electric and hybrid vehicles.

The federal government also hopes the new investment will help boost home-grown mining companies that produce the nickel and other metals used to make the batteries for electric vehicles.

By tapping into its unique natural resources and using them domestically rather than shipping them abroad, Canada can play to its strengths as it helps the auto industry evolve and recover from the pandemic, the federal minister for innovation said.

“It’s about leveraging the very strong and robust supply chain that we have, it’s about leveraging the over 40 different academic institutions that have partnerships with the automotive industry to help with the transition to these new technologies and new solutions,” Navdeep Bains said in a telephone interview.

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“And so we have a very compelling value proposition, we feel that Canada can and will be a global leader when it comes to producing batteries, and building zero-emission vehicles.”

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