Thank you, Mr. Chair and members, for the opportunity to come and speak. Thank you for the invitation.
I won't belabour Mark's inventory of some of the regulatory issues. There is no daylight between the vehicle manufacturers and the parts manufacturers. I'll give you a bit of a contextual overview and speak a bit contemporaneously about the industry itself so you have context for what we're talking about.
The APMA, first of all, is Canada's national association representing OEM suppliers of parts to final assembly, both to the Canadian footprint and for export abroad. Founded over 60 years ago, we represent 95% of independent parts production in Canada, and that includes many machine tool, die, and mould makers.
In 2015, shipments by our industry were $25 billion, the GDP contribution was $6 billion, and direct employment was 81,000 people. We also have a formal partnership with the Canadian Association of Moldmakers, representing 70 mould makers whose subsegment of the industry ships $2 billion of products a year.
In the Canadian auto sector, we talk about innovation and we talk about chasing new investments. We talk about taking advantage of our trade relationships through trade agreements and our geographical proximity to the world's greatest economy. The first added-value sector that was built in the Canadian economy in the early 20th century was the automotive sector.
It started over 110 years ago with Walkerville Wagon Works' production of the Ford Model A in Windsor, and four years later with the joint venture of Mr. Sam McLaughlin and the Buick Motor Company to provide engines to carriages to sell vehicles. The industry is bookended by Oshawa and Windsor, and 95% of this activity is on a 250-mile or 400-kilometre stretch of Highway 401.
The difference between the Canadian automotive sector and its direct competition within the Great Lakes region, which up until 20 years ago was its only North American competition, was that after the American wave of 100 years ago, Ontario and Canada were the beneficiaries of the Japanese investment wave. In 1984, 1986, and 1988, Toyota, Honda, and Suzuki, in the now wrapped-up partnership with General Motors, all invested in final assembly in Ontario.
Canada's first substantive international trade treaty was the 1965 Auto Pact, which ensured the efficient integration of the auto assembly business in the Great Lakes region. In many quantitative and qualitative measures, it's the most integrated supply chain in the world. Our supply chain successfully competed for product mandates with international competitors for over 90 years and we're very competitive in overseas markets as well.
Mark went over the industry snapshot, so I'll just add a few pieces. Of manufacturing GDP, 10% is automotive; 21% of merchandise trade in manufacturing is automotive; and Canada represents 14% of NAFTA vehicle production in total. Our annualized rate is about 2.4 million units, all of which is happening along that stretch of Highway 401 in southwestern Ontario.
There is also heavy truck and bus assembly in Quebec and Manitoba, and specialized, very high added-value technology—I think fuel cell technology—in B.C. We're very export intensive: 75% of annual output leaves the country; 88% of vehicles assembled leave the country; and about 51% of auto parts built here leave the country.
In auto parts, we have 450 companies representing 1,250 facilities. For the machine tool, die, and mould makers, there are 200 firms, and they are concentrated very heavily within a 150-kilometre corridor from the Detroit-Windsor border.
Assembly plants are the main drivers of any automotive business. The manufacture of vehicles is a very localized venture. You put a plant in a location and your customers, whether they are Mark's members or other members, will expect that their supply happens in concentric circles around the plant.
Sometimes that's location, and sometimes that's timing, and sometimes you manage the location and timing within inventory requirements. The point is that if you're going to supply an auto assembler, if you're supplying an OEM, you're going to supply a very specific plant, and you're going to do it in the comfort zone as prescribed by that company.
I say that because it's very important to note that we have 19 facilities run by OEMs in Canada, from five different OEMs. That is a distinct advantage that we have specifically in Ontario over a lot of the other subnational jurisdictions in the Great Lakes and in the U.S. southeast. We have Fiat Chrysler in Brampton and Windsor. We have Ford in Oakville. We have General Motors in Oshawa, Ingersoll, and St. Catharines. We have two plants at Honda in Alliston. We have the Toyota facilities in Cambridge and Woodstock.
To note on those facilities, the first place that Toyota decided to build a Lexus brand new product anywhere outside of Japan was Canada. Then recently, in the last year, the first place where Toyota has announced the assembly of hybrid Lexuses is in Canada. In the heavy truck and transport assembly business, which my members also supply but to a much smaller degree in volume, 2.4 million light vehicles are produced and 150,000 heavy vehicles are produced. You're looking at Blue Bird in Quebec making school buses; Hino, which is a Toyota subsidiary, making class 4 to 7 trucks in Woodstock; Lion Bus, MCI, and New Flyer in Manitoba; and PACCAR and Volvo Bus in Quebec.
To note in terms of recent OEM activity in Ontario that impacts the sector, we also have the news of last month, which is that as a result of the collective bargaining agreements between General Motors and Unifor, there's a renewed commitment to Oshawa. One very important cluster bookend in our business has been secured at least for the next four years. It is incumbent on the federal government and the provincial government to partner in building up the tools that are required for the new products allocated.
Honda, as a result of the CETA negotiation, and pre-ratification, has declared its Alliston assembly plant the global lead for the Civic and CRV. I went over Toyota. Oakville assembly, for Ford, is the global exclusive for the Ford Edge platform. FCA's Windsor assembly is its lead for the minivan. While there's a lot of discussion of the product mix, and are we in the right product mix in terms of fuel efficiency and size, certainly the assets that the companies run in this country are very important assets within their families.
Much has been given about Canada's relative place in automotive assembly in North America falling to third place behind Mexico over the last 20 years, and specifically over the last five years. Of the last 11 greenfield investment announcements in North America, eight have gone to Mexico, and the other three have gone to the U.S. southeast. An important context is that the Great Lakes region and the Great Lakes cluster, of which Canada, Ontario, is one-third by units of volume, so about 7.5 to 8 million units of volume of installed capacity, is still much bigger than the U.S. southeast, which last year was 5.7 million vehicles assembled, and Mexico, which was 3.5 million. Mexico will crest around five million, but in terms of subnational jurisdictions, Ontario still is ranked either first or slightly second, depending on the year, behind Michigan. That's a very important distinction.
The Canadian supply base is a good mix of private and public companies, Canadian companies and foreign transnationals, but it's very important to note that amongst the global 100 there is a lot of Canadian representation, led, of course, by Magna, which last year ranked number two in the Automotive News' 100 global suppliers. But there are Linamar, Martinrea, Woodbridge Group, ABC, all globally relevant firms, all significantly materially higher than $1 billion of activity annually, in Linamar's case, $5 billion, in Martinrea's case, $4 billion.
The traditional competition is adapting. While Canada held its own, this government and the provincial government partnered with the U.S. Treasury in a restructuring of the industry to anchor General Motors and Chrysler and, by extension, the rest of the industry in the Great Lakes. New investment and added value investment is going south.
Much has been made of the flight of suppliers. Suppliers move with customers by necessity, but what Canadian suppliers have been doing over the past five years is co-locating. When a new investment in Mexico...maybe you need to supply investment from Mexico, but you'd keep your headquarters here in Canada.
I'll leave you with a NAFTA snapshot. In partnership with the Canadian trade commissioner service in Mexico, we participated in a survey of Canadian supplier investment in Mexico, tracking how many companies, their locations, and the trends.
The gross numbers are that 55 Canadian companies have invested in Mexico, have set up 110 facilities over the last 10 years, and the growth rate is 20% year over year. Those companies have all maintained a footprint in Canada. Some have set up a service shop. Some have set up new footprints. The reality for a Canadian supplier is that there is little growth in the Canadian market, although it's solid and thanks to some of the current negotiations, but all the growth is in Mexico.
Thank you.