While there remains a great deal of work to be done, we wanted to take this opportunity to review the principal achievements of The Future of Canadian Automotive Labourforce (FOCAL) Initiative over the past three years.

Funded by the Government of Canada, this massive three-year effort is a collaboration between the Canadian Skills Training and Employment Coalition (CSTEC), the Automotive Policy Research Centre, and Prism Economics and Analysis.

Supported by a wide and powerful range of stakeholders – including but not limited to representatives from Ford, General Motors, the APMA, Magna, the Woodbridge Group, Martinrea, Unifor, the Trillium Network for Advanced Manufacturing, the United Steelworkers, and all three levels of government – our research findings are forensic, comprehensive and, above all, actionable.

A forensic analysis rooted in reality

The FOCAL Initiative, which began in October 2018, has produced labour market profiles, forecasts and trend reports related to Canada’s automotive production and technology sectors, including its extensive and complex supply chain. Approximately 50 papers have been produced, each analyzing labour market issues important to the sector.

But we didn’t stop there.

FOCAL also sought out and engaged automotive industry leaders drawn from assemblers, suppliers, unions, government, educational institutions, and NGOs with one primary purpose:

To ensure the relevancy of our work to stakeholders, students, job seekers and the entire Canadian automotive production supply chain, our work was rooted in reality. Far from theoretical, FOCAL efforts have examined vitally important trends such as:

• The impact new technology would have on labour markets
• Attitudes that women, youth, and indigenous peoples have towards the sector
• Ongoing attempts to increase skilled trades apprenticeships
• The unique challenges that face employers in rural regions

The real size of the automotive production sector

One of the principal findings of our research concerns the real size of the category. It is considerably larger than was originally thought.

A complex and dynamic network of businesses, a comprehensive accounting of the automotive sector goes way beyond vehicle assemblers and parts manufacturers. It encompasses many other automotive suppliers, including producers of metal, plastic, rubber, or glass products. 

And when you factor in the automotive production supply chain, further inclusions should accommodate computer and electronics manufacturers, engineering, design, management consulting and software services.

The graphic below demonstrates the overall size and impact of automotive production in Canada. It is, self-evidently, massive and far reaching.

Based on our analysis, we conclude that in Canada’s automotive manufacturing sector, there are:

• 38,000 vehicle assembly jobs
• 80,000 vehicle parts manufacturing jobs
• 70,000 other primary automotive supplier jobs

At the time of our data analysis in 2018, the automotive manufacturing sector employed around 188,000 workers.

FOCAL examined additional employment in automotive research and technology development in research offices of automotive companies, academic labs, government facilities, and non-profit organizations. More specifically, FOCAL looked at six automotive technology clusters across Canada (including GTHA, Ottawa, Kitchener-Waterloo-Cambridge, Windsor, Montreal, and Vancouver).

In this analysis, FOCAL used an enterprise-level analysis to estimate automotive technology employment in these six clusters.

We found that there are around 29,000 automotive technology employees in these six clusters, of which 7,000 were previously accounted for in FOCAL’s workforce model.

The enterprise-level analysis of the six automotive technology clusters resulted in an additional 22,000 automotive technology employees.

Overall, FOCAL estimates that there are over 210,000 employees in automotive manufacturing and technology operations in Canada, which is substantially higher than previous industry estimates of 125,000 employees.

The importance and impact of automotive production to the Canadian economy

Automotive production in Canada needs to be looked at holistically, specifically with respect to the entire Canadian economy.

It needs to be recognized that among the member nations of the Organisation for Economic Co-operation and Development (OECD), Canada is one of the more export-dependent countries in respect of bringing value to its economy.

Exports are also a source of economic growth and employment.

There is an important analogy to be drawn between our automotive industry and the oil and gas sector. This latter sector was the largest exporting industry in 2019, while motor vehicle manufacturing and motor vehicle parts manufacturing were the second and sixth largest exporting industries respectively that same year.

In 2019, Canada exported $59.1 billion worth of assembled motor vehicles, and $17.7 billion worth of manufactured motor vehicle parts. When combined, assembled vehicles, and manufactured automotive parts accounted for 13% of total exports in 2019.

To demonstrate the economic impact and contribution of automotive production, FOCAL carried out two simulations using 2015 economic input-output tables. We have deployed these simulations in earlier blogs but they’re worth repeating.

The two simulations measure the impact (job creation and growth in economic activity) that shifts in the volume of assembled vehicles produced and/or shifts in the volume of auto parts exported would have on the broader Canadian economy.

The results of both simulations, including the direct and indirect impact of the Canadian automotive supply chain, and the induced impact on the Canadian economy are summarized in the graphic below:

• The results of both simulations underline the overall contribution of automotive production to the broader Canadian economy
• In both scenarios, the impact is not limited to job creation and growth in economic activity in the Canadian automotive supply chain, but extends to adding jobs and economic activity beyond the sector and in various parts of the Canadian economy

FOCAL Initiative recommendations

It is hardly surprising that a wide range of recommendations fall out of the work executed through the FOCAL Initiative during the past three years. It is also hardly surprising that, given the size, complexity, and continued growth of the Canadian automotive industry, we do not consider our work to be complete.

There are 22   recommendations FOCAL is proposing . All are specific, data-driven, and actionable.

In addition to covering key labour market issues and trends, we address the need for continued collaboration on workforce development and recruitment. We recommend the development of a strategy to increase the supply of skilled trades and other technical occupations. We also recognize the need to develop transition strategies for workers impacted by technological change – which is massive and ongoing.

Finally, there is no doubt that the government has a key role to play in helping the automotive industry meet its labour market challenges.

Find out more from FOCAL

The Future of Canadian Automotive Labourforce (FOCAL) Initiative is a collaboration of the Canadian Skills Training and Employment Coalition (CSTEC), the Automotive Policy Research Centre and Prism Economics and Analysis. 

Funded by the Government of Canada, you can find out more about us on our website and follow us on Social Media – LinkedIn, Facebook, Instagram and Twitter – and through our newsletter.