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After years of decline, the auto industry in Canada is making a comeback

RACHEL MARTIN, HOST:

The U.S. gets all the attention for car manufacturing in North America. But after years of decline, that industry is making a comeback in Canada. NPR's H.J. Mai traveled to Ontario to find out why.

H J MAI, BYLINE: I'm in the Canadian city of Windsor, Ontario, just across the river from Detroit. The truck traffic on the Ambassador Bridge connecting the two cities shows the economic importance of their close, cross-border tie. It's only when I spot the roughly three dozen Tim Hortons locations, a popular Canadian coffee and doughnut chain, that I realize I'm not in the U.S. anymore.

UNIDENTIFIED PERSON: Could I get a Double Double myself?

MAI: Windsor has benefited from this close connection to Detroit and the big three carmakers that are located there. It's been the city's economic engine for more than 100 years. And President Biden's landmark climate bill, known as the Inflation Reduction Act, promises to accelerate Windsor's re-emergence as an automotive heavyweight.

DREW DILKENS: Companies that are looking at the new world of automotive and figuring out what role they're going to play, they're going to start looking at Windsor-Essex as a place to do business.

MAI: Mayor Drew Dilkens says Windsor is humming again, as new production lines open and additional shifts return. A multibillion-dollar investment from Stellantis, the maker of Chrysler cars, and South Korea's LG to build a new battery factory in town is further proof that things are trending up.

DILKENS: Five billion dollars, 3,000 jobs - it is not a small, little investment. For a community like ours, it is a massive, game-changing investment. And I'm not even sure those two words are quite, you know, big enough.

MAI: The U.S. climate legislation adds yet another gear. It provides tax credits to EV buyers, but only if the cars and batteries are largely made in North America, and the materials used in batteries, such as lithium or nickel, are mine locally. This gives Canada a clear advantage, according to GM Canada's David Paterson.

DAVID PATERSON: Our supply chains in North America have been global in the past. Now we have an opportunity to bring some of that back, more to North America, as we shift to making batteries.

MAI: But the industry faced a number of challenges during the past two decades. Like Michigan, Ontario's auto sector was hit hard by increased automation and the NAFTA trade agreement, as carmakers moved their assembly lines to places like Mexico. Windsor posted some of the highest unemployment numbers in the province for a while.

ANGELO DICARO: We've seen disinvestment in the sector. We've seen job losses in the sector. We've seen plants closed and communities basically disappear as a result of that.

MAI: Angelo DiCaro is the director of research for Unifor, a union that represents roughly 230,000 Canadian auto workers. But change is in the air, and car companies have taken notice, says Flavio Volpe, president of the Canadian Auto Parts Manufacturers' Association.

FLAVIO VOLPE: Ontario, in the last 18 months, has had the greatest run of new investment in vehicle production in its entire history.

MAI: Ontario has attracted more than $16 billion in planned investments during the past year and a half, yet competition - especially from the U.S. - remains high. Canada's auto sector is also highly dependent on U.S. buyers, with nearly 80% of cars produced in the country ending up on American roads. Nevertheless, Volkswagen and Tesla both publicly confirmed they are looking at Canada as a potential site for a new battery plant, and that's got Canada feeling optimistic about the future.

PATERSON: Let's work our way through this. Let's make the transition to electric. Let's optimize the system as best we can. And then let's take on the world.

MAI: Canada wants to become a global hub for electric vehicle and battery production, and it is laying the groundwork now.

H.J. Mai, NPR News, Windsor, Ontario.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

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