Mr. Speaker, on May 7, 2002, the member for Palliser put a question to the Minister of Industry regarding what the government planned on doing to give a boost the Canadian auto industry.
Recently, we have seen and heard bad news accompanied by comments regarding the future of the auto industry in Canada, and I am happy to have the opportunity to speak on this.
First, I would like to dispel the myth that the auto pact had a negative impact on the Canadian auto industry and that the industry is in decline, as the member for Palliser inferred. Nothing could be further from the truth.
The Canadian auto industry is in very good shape, it is competitive internationally and is very productive for reasons that have nothing to do with the auto pact. For a long time now, the industry has surpassed many of the production requirements in the auto pact. So in reality, the World Trade Organization's decision has not had a significant impact. Canada has now established a level playing field for all automobile manufacturers. The 6.1% tariff on all vehicles produced outside of North America encourages them to set up shop and manufacture in Canada.
The most recent data for the auto industry show that, between April 2001 and April 2002, Canadian production of cars and trucks increased by 15%. According to industry analysts, last year, over 256,000 vehicles were made in Canada. This increase in production shows that the vehicle market in Canada and in the United States is faring better than anticipated. Let us not forget that automobile production and sales reached an all-time high in 1999 and 2000.
However, Canada, like other countries, felt the impact of the recent North American economic downturn, of the restructuring that the industry had to go through to adjust to changing consumer demand, of the internal problems experienced by some companies, and of the overcapacity that exists in North America.
But let us be clear about one thing: the Canadian industry remains sound and competitive. Canada continues to be a great place to make cars and trucks, as evidenced by the following examples: Honda selected its Alliston plant, in Ontario, to build the new Pilot sports utility vehicle that will be sold across North America; General Motors is creating 1,000 new jobs at its Oshawa plant to produce the Chevy Impala; Daimler Chrysler recently announced that it would invest $460 million to prepare its Windsor plant for Chrysler's new Pacifica model; Ford and Toyota also announced investments of several millions dollars in the coming years.
The auto industry is investing in Canada because our economic foundations are sound, our manpower is highly qualified while its cost remains competitive, and the business climate is excellent, given our low inflation rate, low interest rates and competitive tax system. Canada remains a place where manufacturing costs are low, which is a major advantage from a productivity point of view.
We realize that Canada cannot rely solely on its past successes and take this vital industry for granted. Our government is working hard to ensure that auto makers will continue to invest and develop in Canada.