CANADA: READY TO COMPETE

Transcription

1 CANADA: READY TO COMPETE PRESENTATION TO THE AREA DEVELOPMENT FDI FORUM OCTOBER 31, 2016 RAY TANGUAY AUTOMOTIVE ADVISOR TO THE GOVERNMENTS OF CANADA AND ONTARIO

2 Ray Tanguay: Canada s Auto Advisor After 19 years in electronics, joined Toyota Motor Manufacturing Canada and held several executive positions: Senior Vice President of Toyota Motor America, Chief Risk Officer and Chief Quality Officer for Toyota North America, Became a Managing Officer of Toyota Motor Corporation in 2005, First non-japanese to become a Senior Managing Officer in TMMC was recognized with 14 J.D. Power IQS awards, only one plant in Japan has more. These include global best Platinum Awards in 2011 and Was instrumental in bringing the first Lexus manufacturing plant outside of Japan to Ontario. Crafted the company s Global Vision, providing a framework for a sustainable future. Named the Automotive Advisor to the Governments of Ontario and Canada in June

3 The Canadian Automotive Eco-system Canada s automotive industry contributes to a strong and innovative economy. Canada produces 1 car every 14 seconds The automotive sector contributes significantly to the economy Sales Key Metrics 2015 C$94 billion Exports 3 GDP Production C$79 billion C$17.5 billion 2.3 million Source: 2013 Business Register, Statistics Canada. One of the highest job multipliers of any industry 10% of manufacturing GDP (or C$17.5 billion) 15.1% of merchandise exports 125,400 Canadians employed directly in assembly and parts manufacturing (and growing at 2.2% per year) Ontario: home to 5 automakers that make popular sellers with a reputation for quality 1 3

4 Canada s Automotive Supplier Base OVER 670 PARTS SUPPLIERS including major international companies Key Supplier Indicators Over 670 parts suppliers 500+ tool, die and mold facilities Annual employment: 84,000 workers C$32B in Canadian-made automotive parts 92% of exports go to the U.S.; 4% to Mexico Waterloo Windsor/Detroit Toronto Highlights Licensed skilled trades Strong supply chain One of 5 global clusters for tool, die and mold making 4

5 The Great Lakes Super Cluster Sizeable consumer market: within a day s drive from over 141 million consumers Prosperous region: A mega marketplace in the North American and global economy Contributes USD$213 billion to US-Canada trade Proximity to R&D Centres: Majority of automotive R&D and purchasing offices located in the Great Lakes region More than 330 R&D centres in Michigan alone (source: CAR) 5

6 Canada within a Great Lakes Super Cluster Great Lakes: 8,193,819 units Southeast: 5,263,224 units Mexico: 3,192,998 units While Mexico and the southern United States have experienced impressive investment, the Great Lakes region remains the heart of the industry in North America. Sources: CAR and Ward s Infobank 6

7 Quality Matters The craftsmanship and quality of Ontario s skilled labour force has led to Ontario assemblers winning one third (29) of all JD Power awards for initial assembly quality in North America. JD Power Initial Quality Plant Awards Mexico Ohio Michigan Kentucky Ontario Ontario s automakers make 7 of the top 10 brands (Lexus, Buick, Toyota, Cadillac, Honda, Lincoln, Chevrolet) ranked by the 2016 JD Power Vehicle Dependability Study. Toyota s Cambridge North Plant- won the 2015 Gold Plant Quality award More so than any other region, Ontario s production facilities continue to lead in assembly quality where it counts in the hands of consumers. J.D. Power & Associates 7

8 How does Canada Rate? KPMG Competitive Alternatives Report (2016): Lowest overall business costs in G-7 8% advantage vs the U.S. for auto parts manufacturing 28% cost advantage vs the U.S. for product testing R&D Other indicators: Much lower corporate tax rate Canada 26.5% U.S. 40% Favourable access to foreign markets Zero tariffs on parts imports Accelerated depreciation on capital Source: KPMG 2016, Tax Foundation, OECD 8

9 R&D Cost Advantage 28% cost advantage relative to the US for product testing R&D, including incentives. Canadian tax credits can generate up to 40% to 60% savings on R&D expenditure. Investment dollars go farther because Canadian universities can leverage R&D support programs: Investment in U.S. = 1 Ph.D Investment in Canada = 6-7 Ph.Ds Canada is ranked highest in the G-7 for availability of qualified engineers. Over 200,600 practicing professional engineers in Canada More Costs Qualify for Tax Credits Ontario US Wages and salaries Materials Overhead 55% Not Eligible Contract expenses 80% 65% Sources: Canada Revenue Agency, Internal Revenue Service, McMaster University, Swiss-based Institute for Management Development 9

10 World Class R&D Clusters Across Canada Canada s automotive industry is well-positioned to capture future growth through R&D and supplier innovation. BC: leader in hydrogen fuel cell research Over 670 traditional parts suppliers, including several global suppliers Quebec: significant capacity in EV research, bolstered by $420 million in provincial funding to promote electric transportation Canada has a highly educated workforce*: 64% of Canadians hold post-secondary degrees and 18.6% in STEM fields Ontario: largest IT region in North America outside of Silicon Valley with expertise in cloud computing, digital displays, robotics, satellite technologies, security, software development and telecommunications *Source: National Household Survey

11 Global Best World-leading Innovation: MaRS: world s largest urban innovation hub, based in Toronto. Communitech: world-leading collaboration and innovation incubator. Waterloo s Accelerator Centre, catalyst for commercialization: 250+ companies supported; 93% survival rate; 1,500+ jobs created; $2B corporate value created. Catalyst 137 is one of the world s biggest hubs for software-enabled devices and the Internet of Things under one roof. Cutting-edge research and applications: D-Wave Systems is the world s first commercial quantum computing company (clients include: Lockheed-Martin, Google, NASA and USC) Majority of the world s fuel cell R&D spending occurs in British Columbia. High-tech firms such as Apple, Google, Cisco, Microsoft & Oracle have already discovered the benefits of locating in Canada. 11

12 Global Best Global best academic / research programs: Canadian universities rank in the top 100 in the Annual World University rankings*: University of Toronto University of British Columbia McGill University Canada Excellence Research Chairs - $43M/year: 27 world-renowned research chairs endowed with up to $10M/ 7 years to establish ambitious research programs at Canadian universities. Including Dr. Ali Emadi, Hybrid Powertrain, McMaster Automotive Research Centre. Canada Research Chairs - $265M/year: 1,650 world-leading research chairs in health, natural sciences, engineering, social sciences and humanities. Stephen Hawking is a Distinguished Visiting Research Chair at the Perimeter Institute, the world s largest centre for theoretical physics. *Source: Times Higher Education World University Rankings ) 12

13 Automotive Universities and Colleges 9 universities and 24 colleges with innovative auto-related research initiatives and training programs in advanced manufacturing University of Waterloo WatCAR Centre for Automotive Research (Waterloo, ON) conducts advanced research to enhance automotive innovation and competitiveness. Over 125 researchers make it the largest university-based automotive activity in the country. Institute for Quantum Computing and the Perimeter Institute The Institute for Quantum Computing is leading the development of advanced autonomous vehicle applications, and the Perimeter Institute for Theoretical Physics is a research institute that has attracted some of the world s top minds. Both are in Waterloo, ON. University of Ontario Institute of Technology Automotive Centre of Excellence at the UOIT (Oshawa, ON) is a unique testing and research facility with commercially available world-leading capabilities. MacAUTO McMaster Automotive Resource Centre (Hamilton, ON) is a coordinating body for advanced automotive research. University of Windsor Automotive engineering specialization and private sector research partnerships Conestoga College Centre for Smart Manufacturing - development of new products and processes for Advanced Sensors, Electronic Systems, Software, Light Manufacturing Production and Assembly, 3D Printing and Materials (Kitchener, ON) St. Clair Windsor The Mechanical Engineering Technology - Automotive Product Design program in the on-site Ford Centre for Excellence in Manufacturing,(Windsor, ON) Ontario has the tools and resources to train employees and bring innovations to market 13

14 Diverse Automotive R&D Multi-material metals Thermal management for Battery and HVAC Mobile phone integration Fuel cells Metal Forming processes Energy management Connected car and infotainment Fuel systems storage tanks Metal joining approaches Synthetic composites and Biological composites Body and chassis design for hybrid/alternative powertrain Application management Integrated console Gaseous control systems Computational simulation design validation Battery performance diagnostics and control optimization Surface & performance 14

15 Focus on Continuous Improvement Ease of doing business in Ontario and Canada Learning from other jurisdictions Creating a concierge-style service Selling Canada s value proposition to the world Understanding the competition and marketing Canada s strengths 15

16 Canada: Ready to Compete With a strong innovation ecosystem, a stable fiscal and economic framework, a highly productive and skilled labour force, and government focused on industry Low Taxes Strategic Location World-class R&D clusters Major Manufacturing Hub Quality Productivity Educated Workforce 16