Despite nearly 1,200 General Motors workers walking off their final shift at the Oshawa plant, experts believe this moment could mark a turning point rather than a decline. According to Ian Lee, associate professor at Carleton University’s Sprott School of Business, Canada’s auto industry is facing a rare opportunity to reset itself by embracing the electric vehicle (EV) transition instead of clinging to traditional manufacturing models.
A Global Shift Forcing Change
The automotive sector worldwide is undergoing a massive transformation driven by automation, electrification, and new supply chains. While U.S. President Donald Trump has argued that tariffs are pushing carmakers back to American soil, Canada is exploring alternative global partnerships. Prime Minister Mark Carney’s recent diplomatic efforts, including negotiating lower tariffs on Chinese-made EVs and strengthening ties with Asian economies, signal a strategic shift away from overdependence on the U.S.
Lee argues that renegotiating old trade terms is less effective than retooling the workforce. Automation and EVs are inevitable, and North America’s slower EV adoption should not delay preparation. “We can’t stop innovation,” he says, stressing that internal combustion engines will eventually be displaced.
Retraining Over Protectionism
Ontario Premier Doug Ford has suggested displaced auto workers could find opportunities in defence and life sciences. While diversification is positive, Lee warns against “protectionism,” calling it a recipe for stagnation and reduced innovation. Instead, retraining workers for EV assembly, battery manufacturing, and advanced automotive technologies is seen as the most sustainable path forward for Canada’s auto industry.
Trade Pressures and Policy Challenges
The reset is not without hurdles. U.S. tariffs on steel and aluminum continue to squeeze manufacturers, while Canada has temporarily suspended its 2026 EV sales mandate that required 20% of new vehicles to be zero-emission. Infrastructure also lags behind goals, with around 38,000 public charging ports active versus a target of 100,000 by 2025.
Still, Industry Minister Mélanie Joly has announced a comprehensive new auto strategy due in February 2026, aimed at addressing these trade and production challenges.
Billions Invested in an EV Future
Long-term optimism is backed by action. Around $50 billion in federal and provincial subsidies are supporting major EV projects, including Volkswagen’s PowerCo battery plant in Ontario, Northvolt’s gigafactory in Quebec, and large-scale battery material and production facilities in Windsor and Loyalist. These investments could redefine Canada’s auto industry, especially as competition from Chinese and South Korean firms increases.
Lee believes this competition is healthy, particularly as Canada currently lacks affordable EVs in the $20,000–$30,000 range. If managed wisely, this generational shift could allow Canada’s auto industry to emerge leaner, more innovative, and globally competitive in the EV era.
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