Canadian Manufacturing

Austere 2014 budget gives auto sector a boost

by Craig Wong, THE CANADIAN PRESS   

Canadian Manufacturing
Manufacturing Automotive Public Sector budget Economic Action Plan Flaherty

Harper government also spending $631 million over the next two years to help build a new Detroit-Windsor crossing

OTTAWA—Ottawa is helping Ontario’s battered manufacturing sector with more than $1 billion in spending over the next two years to help the auto industry and build a new bridge to the U.S. at Windsor, Ont.

The federal budget Tuesday called for spending $631 million over the next two years to help build a new Detroit-Windsor crossing.

“Our investment in the new Windsor-Detroit crossing means Canadian goods will get to market faster, allowing businesses to grow, expand trade and help secure a prosperous future,” Finance Minister Jim Flaherty said.

The commitment includes $470 million in new funding and is up from a plan to spend $25 million over three years in last year’s budget to help advance the project.


The Windsor-Detroit trade corridor handles roughly 30 per cent of Canada-U.S. trade by truck, the government estimates.

Delays in crossing the border are a major headache for the auto industry, which relies on the timely delivery of parts and other supplies to keep their production lines moving.

Southwestern Ontario also stands to benefit from an additional $500 million over two years being added to the Automotive Innovation Fund.

The cash injection for the fund comes as Chrysler contemplates a billion-dollar upgrade to its minivan plant in Windsor. The automaker has been in talks with the federal and provincial governments about an incentive package to help offset what it says are higher costs in Canada.

The downturn in the economy during the recession and the strong Canadian dollar hammered Ontario’s manufacturing sector leading to thousands of jobs lost. However, the U.S. economy has started to gather steam and the loonie has fallen in recent weeks, both positives for the factories producing goods destined for export.

Broadly, the budget contained little new spending for businesses and while it pledged no new taxes on business, it did close a number of tax loopholes including the use of certain derivatives.

The government also promised to provide $28 million over two years to the National Energy Board to help in the review of the projects including TransCanada’s Energy East pipeline within the legislated timelines.

The tariff on mobile offshore drilling units will also be permanently eliminated. Their duty-status was set to expire this year.

Many of the changes proposed in the budget did not carry a price tag, including encouragement of internal trade between the provinces.

The federal government has also proposed to bring the regulation of over-the-counter derivatives under its Co-operative Capital Markets Regulator, once it is operational.


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