The second-largest auto parts manufacturer in Canada, Guelph-based Linamar Corporation, has announced a $1.1-billion investment into domestic green auto manufacturing with the backing of the federal and Ontario governments.
“It’s a win for the economy, the environment and Canadian jobs, cementing our country’s position as a leader in the EV supply chain.”
François-Philippe Champagne
Innovation, Science and Economic Development Canada (ISED) committed up to $169.4 million through its Strategic Innovation Fund (SIF). The Ontario government will provide a grant of over $100 million through Invest Ontario.
Linamar’s Innovation Driving Green Technology Project aims to develop a variety of technologies to power hybrid and electric vehicles (EVs), including powertrain solutions, hydrogen fuel cell technology, and a new semiconductor packaging method to reduce the charging time for EV batteries.
“Linamar’s groundbreaking project will drive innovation in EV parts and semiconductor manufacturing,” François-Philippe Champagne, Minister of Innovation, Science and Industry, said in a statement. “It’s a win for the economy, the environment, and Canadian jobs, cementing our country’s position as a leader in the EV supply chain.”
The investment is expected to add 2,300 jobs in Ontario’s automotive industry. The project will be deployed at Linamar’s Ontario facilities Guelph, Salford, Welland, and Windsor.
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The government-backed investment comes as US President Donald Trump threatens to levy 25-percent tariffs on Canadian imports as early as Feb. 1, which are expected to directly impact Canada’s auto industry.
“At a time when we face a new administration in the White House and the potential threat of tariffs on Canadian goods, this investment will create good-paying jobs, strengthen our homegrown electric vehicle supply chain and accelerate the production of Ontario-made EVs,” Ontario Premier Doug Ford said in a statement.
That’s not the only Trump-related policy change that could impact EV supply chains in Canada. The US president revoked a 2021 commitment to ensuring that half of all vehicles sold in the US would be zero-emissions by 2030. Trump has also indicated he would repeal a consumer tax credit for EVs.
Some Canadian EV incentive programs are also in jeopardy. Canada’s Incentives for Zero-Emission Vehicles program, which gave buyers up to $5,000, was suspended this month. Québec announced it would temporarily pause an equivalent program starting this February due to a lack of funds.
Despite the uncertainty of incentives, EV sales are expected to grow steadily within the next decade, following the Canadian government’s pledge to hit 100 percent zero-emission vehicle sales by 2035. Zero-emission vehicles reached record sales in Canada in Q3 2024, accounting for more than 15 percent of new vehicle registrations, according to data from Statistics Canada.
Part of the SIF investment will go towards developing semiconductor technology, in line with the initiative’s SIF Semiconductor Challenge Callout which asked Canadian companies to develop ideas to help make the country a critical global supplier of semiconductor technology.
The investment continues ISED’s interest in semiconductor manufacturing and commercialization. The government agency invested $120 million into the creation of the Fabrication of Integrated Components for the Internet’s Edge (FABrIC) network to spur semiconductor innovation last summer.
Feature image courtesy Linamar Corporation.