Thank you for having me. It's always a pleasure to be here in Ottawa to speak to a committee.
We are talking about North American relations, ostensibly U.S.-Canada relations. I'll give you a little background on the automotive sector in Canada and how connected it is with the automotive sectors of the U.S. and Mexico.
In Canada the automotive supply sector ships 32 billion dollars' worth of goods a year, and we employ 96,000 people. Some of the companies you would know are Magna, Linamar, and Martinrea. There are, however, other companies that are ascendant and important in the new space. We have Ottawa-based companies like QNX, and companies that own the market on global infotainment. We also have companies like Valiant, which is a large Windsor-based tool company now in the midst of M and A activity with the Chinese, which is contextual here.
Canadian automotive parts companies employ 42,800 people in the United States in 150 facilities, as as well as 43,400 in Mexico in 120 facilities. Canadian interests in automotive supply cannot be described geographically to be solely within the borders of Canada, even though probably 95% of our domestic industry sits between Windsor and just east of Toronto.
When we talk about NAFTA and when we respond to cues by the American President about American interests, the commentary usually concentrates on American geographic interests and American companies. Big American companies, however, count on the Canadian parts supply sector and our assembly sector, including but not limited to the Detroit Three. Canada has big operations from the Detroit Three in that corridor, and our supply sector serves many of those facilities, including Toyota and Honda.
The Canadian interest in Mexico is not a reciprocal one. Mexican automotive investment in Canada is limited to Nemak operations in Windsor. Our Canadian automotive market is just short of two million vehicles, and growth as well as retraction is in single digits.
We make 2.4 million vehicles a year. That's down from a peak of 3.1 million vehicles in 1998. The growth market for my members and parts suppliers has been in new OEM investments in the U.S. southeast and in Mexico.
In 1998 we made twice as many vehicles as Mexico. Last year, Mexico made 3.4 million vehicles, and if the President's social media influence doesn't slow the number down, that number should go up to 4.8 million vehicles by 2021.
Mexico is a very important market for Canadian parts suppliers. We send product down the continent; we invest in Mexico, and we employ locals. The same can be said for the U.S. southeast. Traditionally, and very importantly, the parts sectors in Ontario and in the states that delivered the presidency are intricately connected. Ontario and Michigan together make more vehicles than Mexico. They make more vehicles than the rest of the Great Lakes states and more vehicles than the other cluster in the southeast U.S.
I provide this context because the signals we get from Washington from the President and the public exhortations stand in contrast to the interests of our commercial partners in the U.S. American automotive companies are telling their representatives in Congress, their governors, and the administration not to hurt them by thickening the border between Canada and the U.S.
Everybody likes to talk about how many times a part can go across the border. Not every part goes back across the border, but if you think about putting a bolt on an engine block that comes back into a car here and then goes to get finished in the U.S. and is then sold to a Canadian consumer, you start to see how important it is to make sure we don't put up visible or invisible barriers at the border. The same can almost be said on the Mexican-U.S. border, although there is no spot that, from a satellite, looks like Windsor-Detroit.
What we've been seeing and hearing in our in-person visits to American automotive capitals and to American political capitals is that everybody should take a breather. I think the gentleman who spoke earlier talked about a NAFTA process. This will be a long process and the outreach by this government, and—I'll give credit where it's due—the bipartisan approach to that outreach to the U.S. are working in keeping the temperature down. Of note is that in Mexico that temperature is not being kept down. The Secretary of Economy has issued challenges a couple of times, and of course the political tensions between the two countries are different from ours. While they're ready to throw down the gauntlet, I think what we're doing is right and that is to provide the time for industry sectors like ours to go speak to people in Lansing and to go speak to people down in Pulaski, Tennessee, who then go back to Washington and say, “You know, you're going to hurt me if you hurt Canada by hurting Martinrea.” Martinrea doesn't employ any Canadians in Tennessee; it employs Tennesseans.
I'll leave that here. It's a very complex matrix, but the automotive interest.... This isn't 1998 or 2002, and we can't unwind what the result of NAFTA is. NAFTA works for automotive, and we're generally optimistic that the facts will work in this case, because the facts support the American interest.
Thank you.