Thank you very much, Mr. Chairman, and thank you to the honourable members today for actually coming to town, so to speak.
As president of the Canadian Vehicle Manufacturers' Association, I am pleased to be here representing Fiat Chrysler Canada, the Ford Motor Company of Canada, as well as the General Motors of Canada Company. Together they are responsible for approximately 60% of all production annually, and as some of the largest multinational companies, exporting vehicles to 100 countries around the world.
Canada needs strong advocacy for its automotive manufacturing sector in order to achieve its economic goals. It will also be essential that the renegotiation of the North American Free Trade Agreement maintain outcomes that support Canada's auto industry and its highly integrated value chain across North America. On one hand, there is significant opportunity to support Canada's automotive sector competitiveness, and on the other, much to lose if we don't get this right.
The automotive sector is undergoing a technology transformation, including but not limited to the introduction of connected and automated vehicles within an evolving shared economy. Due to the strength of Canada in software engineering and innovation, significant investments have been made and partnerships established in Canada by Canadian member companies focusing on the car of the future.
For budget 2018, CVMA urges the government to continue the momentum it has developed, with a focus on the following items. The first one is the strategic innovation fund. The CVMA commends the government for introducing the ability to offer non-repayable investment support in the former automotive innovation fund, and we are pleased to see that this has been carried over to the amalgamated strategic innovation fund.
With the migration of the AIF, as we call it, into the broader SIF, the industry will be looking for assurances that there is the same degree of investment support for automotive investments as was previously available under the AIF.
The CVMA recommends that the innovation policy framework remain responsive and sensitive to the attraction of new investments. That will involve Canada vigilantly monitoring the incentives offered by other jurisdictions to ensure its own programs and policies are competitive, accessible, and useful.
Secondly, on the innovation superclusters initiative, further to the government's announcement of the short-listed nine superclusters, we are hopeful that the innovation partnerships going forward will not be limited only to the superclusters. To that end, we will continue working with government, academia, and industry as innovation opportunities are identified, developed, and implemented.
Thirdly, in terms of manufacturing research and development tax incentives, the Canadian auto industry is a major investor in the research and development of technologies that spur advanced production processes and vehicles that meet both public policy objectives and the driving experience demanded by consumers. We recommend a research and development program that is more flexible and responsive to the needs of industry and administratively efficient to help support the innovation agenda by promoting automotive research excellence and the opportunity to build on the existing research capacity.
A tax research credit that is truly supportive of innovation must be robust and reflect the true cost of advanced manufacturing R and D, inclusive of capital equipment, and based on a broader definition of innovation versus the current definition of science. Further to this, an allowance for our capital expenditures to support large-scale investments, which lead to job creation and retention, would also encourage manufacturing innovation investments.
While not all members utilize or benefit from the SR and ED tax credit, claiming the SR and ED credit is increasingly becoming more onerous and the current definitions under the program are simply too narrow. We would welcome again the opportunity to engage with government to explore ways of implementing an effective research experimental support program.
Our fourth recommendation is for continued investment in Canada's trade corridors. The CVMA recommends that the government build on the budget 2017 commitments to multi-modal border infrastructure interconnectivity, as well as funding support to implement the improved cross-border labour mobility processing procedures. We also look forward to the completion of an additional bridge crossing in the very important Windsor-Detroit gateway.
In addition to these recommendations, there are some very important considerations that, if left unaddressed, could undermine the objectives of the innovation agenda, for instance, an electric vehicle policy.
The electric vehicle market is clearly in its early stage of development and manufacturers have committed an estimated $100 billion to developing and bringing a rapidly increasing number of electric vehicles to market. The CVMA has been very active in the development of the pan-Canadian framework for an electric vehicle strategy and we believe a collaborative partnership between industry and government will lead to greater success towards increasing electric vehicle adoption.
We therefore encourage the federal government to do the following: continue the support in terms of electric vehicle recharging infrastructure that was announced in 2017, and provide further support by matching provincial government EV recharging infrastructure funding commitments dollar for dollar, if possible; establish federal incentives to help consumers with the purchase of electric vehicles that could be stackable on some of the provincial incentives; and lastly, examine tax policies that actually act as disincentives to EV adoption. Here I'm talking about workplace charging for employees being a taxable benefit.
We strongly recommend that the federal government avoid a zero-emission vehicle mandate, as we call it, given the potential negative consequences for consumers, dealers, and manufacturers. Rather, we recommend it focus on a more collaborative approach to enhance electric vehicle adoption.
Another opportunity to encourage EV adoption is to accelerate turnover of the existing on-road fleet. Such an approach would be less costly and provide even greater environmental as well as safety benefits more quickly.
My last comment relates to the aggregate policy impacts on operating costs. Automotive manufacturing in Canada is experiencing many operating cost challenges. We must be mindful of the aggregate impact of these cost factors on operations in Canada, which already makes us the highest-cost jurisdiction to produce vehicles.
On that point, Mr. Chairman, I'd be glad to answer any questions the committee members may have. Thank you.