Conservatives' $1B pledge for auto sector just 'a drop in the bucket'

The Conservatives pledged Tuesday to provide $1 billion for the Canadian auto sector if re-elected into government, a promise that received mixed reviews from stakeholders and industry observers.

On Tuesday, Conservative Leader Stephen Harper announced the new funding, which would be delivered over a 10 year span as part of its Automotive Innovation Fund.

The move comes just a day after it was announced that Canada joined a Pacific Rim trade pact that involves 11 other countries. The members of the Trans-Pacific Partnership, or TPP, comprise some 40 per cent of the world's economy.

As part of the deal, Canada will phase out a 6.1 per cent tariff on imported vehicles over a five-year period. And vehicles will be able to be imported into Canada without tariffs as long as they have at least 45 per cent content from TPP countries.

'Clear acknowledgement' of coming job losses

In Windsor, Ont., Chris Taylor, the president of Unifor Local 200, said the Conservatives' pledge on Tuesday was essentially an admission that the country's auto sector will see job losses as a result of the TPP.

"This is a clear acknowledgement that the TPP agreement and the loss of the tariffs — especially over a short amount of time — is certainly going to mean job loss, otherwise he wouldn't have put that money out," Taylor said Tuesday.

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Taylor said the Conservatives have not "delivered" for the auto industry during their near-decade in power. The funding announced Tuesday is "too little, too late," Taylor said.

"It's a drop in the bucket," said Taylor, of the funding that works out to $100 million a year.

That view was echoed by Unifor's national president, Jerry Dias, who said the announcement was "all about politics."

Dias acknowledged the money may be "helpful" to some degree, but is not enough to be a meaningful source of aid.

"If you understand the auto industry you'll know that $100 million per year for 10 years really is not very much," he said.

Dennis Des Rosiers, an auto industry analyst, however, said the $1 billion, if delivered, would not be considered huge in the context of the auto industry. But that doesn't mean it is not important.

"This is a game where a billion dollars can be blown out the door on one project. This is $100 million per year," he said. "But without it we're dead — with it we're at least in the game."

Tony Faria, the co-director of the Office of Automotive and Vehicle Research at the University of Windsor, believed the money had the potential to help retain existing automotive investment in Ontario and allow some businesses to make upgrades to their facilities and increase their innovation efforts.

"It is not unfortunately, enough money to attract a new automotive assembly plant investment," Faria told CBC News on Tuesday. "We need to be talking $1 billion a year in a program in order to do that, not $1 billion over 10 years."