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Ontario guidelines for autonomous vehicles state there must be a person who knows how to operate the car in the driver’s seat at all times.

YUYA SHINO/REUTERS

Ontario plans to become the first province to allow self-driving vehicles to be tested on public roads, say sources familiar with an announcement scheduled to be made Tuesday in Waterloo, Ont.

Testing of autonomous or self-driving vehicles can begin as early as Jan. 1, sources said, as Ontario seeks to grab a share of the billions of dollars auto makers, parts companies and technology giants are spending to develop cars that drive themselves. The province's move will create better opportunities for Canadian companies to test components and show auto makers their technologies.

The prospect of self-driving cars was believed to be decades away, but tech companies and auto makers are in a race to bring such vehicles to market. Many vehicles already carry features that keep them in their lanes, speed them up or slow them down depending on traffic in front of them and enable them to park themselves.

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The Ontario plan will allow autonomous vehicles to drive on any roads, although it's likely to be mainly on secondary highways and some city streets. That differs from Virginia, for example, which is establishing what it calls Virginia Automated Corridors on about 110 kilometres of highway, where autonomous vehicles can be tested in real-world conditions.

Under Ontario guidelines set up last year, there must be a driver trained in how to operate an autonomous vehicle present in the driver's seat at all times. The vehicles being tested must have a mechanism to disable the autonomous technology so the driver can take over and a system to alert the driver if the technology fails or unexpectedly shuts down. Drivers and owners will be subject to the speed limits and other regulations that exist under the province's Highway Traffic Act.

Nevada, California, Michigan, North Dakota, Tennessee and Florida also permit autonomous-vehicle testing on their roads.

Toyota Motor Corp. said last week it plans to have self-driving vehicles available for sale in Japan by 2020.

The main benefit of autonomous vehicles is safety – a reduction in the hundreds of thousands of deaths and billions of dollars in damage caused annually by vehicle accidents around the world. Smart vehicles, roads and transportation systems are also expected to lead to reductions in fuel consumption.

Ontario is offering $2.5-million to support projects through its ConnectedVehicle/Autonomous Vehicle program, which encourages auto makers, suppliers and colleges and universities to develop innovations that could be used in automated vehicles and connected vehicles, which are wired as for WiFi and not self-driving.

"Demand for higher automation will continue to be driven by increased safety, enhanced customer satisfaction and a more efficient use of resources, including fuel and transport infrastructure," auto industry analysts from Barclays Capital Inc. said in a recent report on what they call disruptive mobility.

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"However, there are still considerable challenges to full autonomy, not just on the technology side, but also from regulations, infrastructure, legal frameworks, liability, ethical issue and consumer acceptance, to name a few," the report said.

Canadian parts makers and technology companies have also identified autonomous vehicles as a key opportunity.

Magna International Inc. has demonstrated a car that will drive itself.

The Automotive Parts Manufacturers' Association of Canada, several of its member companies and the University of Waterloo have equipped a Lexus RX350 built in Cambridge, Ont., with a suite of technologies developed by Canadian companies.

It will not drive itself, but it has broadband connectivity and on-board WiFi, a camera and vehicle proximity sensors and an early-warning system that alerts drivers that emergency vehicles are approaching.

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