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Ottawa, Ontario earmark $34-million for Toyota plant

Ontario Premier Dalton McGuinty, left, and Prime Minister Stephen Harper are seen at the Toyota plant in Cambridge, Ont. Wednesday, January 23, 2013. The two were on hand to announce new investment in the production of hybrid vehicles.

Kevin Van Paassen/The Globe and Mail

The federal and Ontario governments will provide up to $34-million to Toyota Motor Manufacturing Canada Inc. to help the auto maker upgrade an assembly to make hybrid crossover utility vehicles.

The financing was announced at the company's plant in Cambridge, Ont., on Wednesday by Prime Minister Stephen Harper and Premier Dalton McGuinty and will apply to a project that will cost about $100-million.

Toyota announced last year that it will manufacture hybrid versions of the RX 350 for the company's luxury Lexus brand in Cambridge and boost production of the vehicles to about 104,000 annually beginning in January, 2014.

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"We have to realize that we are competing against other jurisdictions," Toyota Motor Canada chairman Ray Tanguay said in explaining why the financial assistance is necessary.

The RX 350 expansion, which the company said last July will add about 400 jobs, is one of two projects under way at the Toyota plants in Ontario. In Woodstock, workers are gearing up to boost production of the RAV4, which has also created about 400 jobs.

The two projects will increase Toyota's output in Ontario to more than 500,000 vehicles annually and employment to more than 7,000 people.

Ottawa and Ontario are providing about $140-million toward another Toyota investment of $506-million to help the company produce battery-powered versions of the RAV4 at the Woodstock plant and improve production processes at both plants.

The announcement of the new $34-million "is emblematic of the co-operation and shared objectives that has characterized the work by our governments over the past few years," Mr. Harper said.

He noted that it would be the last public event he would attend with Mr. McGuinty, whose nine-year term as Premier will end this weekend when his successor is chosen by the Ontario Liberal Party.

Mr. McGuinty said the co-operation between the two governments to help bail out Chrysler Group LLC and General Motors Co. in 2009 helped to save more than just those two companies. Keeping parts makers afloat aided the other auto makers that form part of the backbone of Ontario's economy, he said.

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About the Author
Auto and Steel Industry Reporter

Greg Keenan has covered the automotive and steel industries for The Globe and Mail since 1995. He also writes about broader manufacturing trends. He is a graduate of the University of Toronto and of the University of Western Ontario School of Journalism. More

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