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Ray Tanguay says his job is determining how he can help Brad Duguid, Ontario’s Minister of Economic Development and his counterpart in Ottawa, Industry Minister James Moore.

© Geoff Robins / Reuters/REUTERS

Ray Tanguay's new job as auto adviser to the federal and Ontario governments is likely to be a lot tougher than the position he left last month, chairman of Toyota Motor Manufacturing Canada Inc.

That's because one of his mandates is to help sell investment in Canada to an industry that has become fixated on building vehicles in low-cost countries – to the extent that auto makers have invested tens of billions of dollars in new plants in Mexico this decade and spent not a dime on new factories in Ontario, where costs are higher.

The first job, Mr. Tanguay said Tuesday at a news conference announcing his appointment, is determining "how I can help the two ministers."

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One of those politicians, Brad Duguid, Ontario's Minister of Economic Development, said the governments need better intelligence from inside the industry on which companies are looking to build factories in North America, and what he and his counterpart in Ottawa, Industry Minister James Moore, can do to steer one or more of those factories to Canada.

"In the old days, Ontario and Canada could allow potential auto investments to come to us without a great deal of marketing or a great deal of solicitation," Mr. Duguid said. "Those days unfortunately are gone, which means we're going to have to up our game."

The creation of a joint Canada-Ontario Automotive Investment and Attraction Board was recommended last year by the Canadian Automotive Partnership Council (CAPC), an industry-union group that advises the two governments on automotive policy.

CAPC, which was formed in 2002, was concerned that Canada was not winning its share of new automotive investment and that government efforts to market and sell Ontario to new auto makers were failing compared with Mexico's ProMexico investment body, the Michigan Automotive Office, and similar groups set up by other political jurisdictions in North America.

"We were concerned that we weren't getting the same level of investment that we were getting in the past," Mr. Tanguay said.

His appointment comes as auto makers continue to bypass Ontario, with Jaguar Land Rover Ltd. rejecting a site in Windsor, Ont., earlier this year and Volvo Cars choosing South Carolina as the location for an assembly plant that will supply North America.

There are also threats to the existing auto plants in Canada. General Motors Co. plans to close one of two factories in Oshawa, Ont., next year and has not allocated any new vehicles to a neighbouring plant. GM Canada president Stephen Carlisle reiterated Tuesday that no decision on new vehicles will be made until after negotiations next year with Unifor, the union that represents workers at the Oshawa plants and an engine and transmission factory in St. Catharines, Ont.

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Don Walker, president of parts maker Magna International Inc., and chairman of CAPC, said that 90 per cent of the focus Mr. Tanguay and the two governments put on the auto sector should be directed at retaining the existing plants operated by GM, Fiat Chrysler Automobiles NV, Toyota Motor Corp., Honda Motor Co. Ltd. and Ford Motor Co.

Expanding existing plants is "a much easier decision for a car maker than saying we're going to go and make a brand new greenfield [plant] because they've already got a lot of the investment here," Mr. Walker said.

Industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc., agreed.

While job one for Mr. Tanguay is to determine why we're not getting new investments, job two is to reassure existing auto makers "that we're addressing their issues because we've got to keep what we have," Mr. DesRosiers said.

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