Mr. Speaker, I am pleased to have this opportunity to speak to the concerns of the hon. member for Windsor West about Canada's auto industry and the ongoing free trade agreement negotiations with South Korea.
The hon. member would have us believe that Canada's auto sector is on life support. The facts clearly show otherwise. Canada's automotive manufacturing industry is one of the most successful and competitive in the world. It employs over half a million Canadians. Canada boasts 12 major assembly plants with a 13th coming on line in 2008, producing 2.5 million cars and light trucks in 2006, about 16% of all North American production.
In fact, in 2006 Ontario outperformed Michigan for the third year in a row as the highest automotive producing region in all of North America. This being said, a restructuring is taking place within the North American auto industry.
The Detroit-based auto assemblers are taking some difficult but necessary decisions to remain competitive and this, regrettably, is impacting Canadian jobs. We are very concerned for the people who are impacted by these business decisions. Affected employees are of course eligible for assistance through existing government programs in addition to the severance packages which the Canadian Autoworkers Union has secured for its members.
At the same time other companies within Canada's auto sector are expanding and creating new jobs. For example, Toyota is building a new $1.1 billion assembly in Woodstock, Ontario which will come on line in the fall of 2008 and Honda is investing $154 million in a new engine plant in Alliston, Ontario, also coming on line in 2008.
Despite the difficult period of global restructuring for the Detroit-based automakers, Canada's assembly plants are winning new product mandates. A new Chevy Camaro will be built in my hometown of Oshawa; the new Dodge Challenger has been awarded to the Brampton plant in Ontario; and in Oakville, Ford is building two new successful crossover vehicles. These are votes of confidence in our auto industry.
Canada's new government will continue to ensure that Canada's auto sector remains viable. Our measures in budget 2006 to reduce corporate and personal taxes make Canada even a better place for auto investment. We have laid out a strategic economic plan in “Advantage Canada” that will create a better business environment for all industries. By continuing to reduce taxes, cutting red tape, building modern infrastructure, and creating a more skilled and educated workforce, Canada's new government is setting the stage for economic growth, opportunity, and choices for people and businesses.
The role of the federal government is to create the right economic conditions to support a strong manufacturing base in Canada. In budget 2007 the government introduced significantly enhanced write-offs for capital investments in machinery and equipment. This is a measure which has been advocated by the Canadian Automotive Partnership Council to stimulate new automotive investment and help ensure the Canadian auto industry remains innovative and competitive.
As for the hon. member's concerns about the impact of a potential free trade agreement with South Korea, studies show that such an agreement will in fact have a limited impact on Canada's auto sector. The implications of the proposed elimination of the tariff are relatively small when compared to the size of the auto industry. This is expected given the current tariff of only 6.1% and the fact it would only be eliminated on 128,000 units or roughly 8% of the total Canadian vehicle sales.
However, what it does have is the potential to deliver significant commercial benefits across a wide range of the Canadian economy from agriculture to high tech services to investment. Free trade agreements ensure that Canada is competitive in key markets. The United States and other countries are aggressively negotiating free trade agreements, including with South Korea. The hon. member for Windsor West can rest assured that the government will only agree to a free trade agreement that delivers substantial benefits for Canada and which is good for the Canadian economy.