Mr. Chair, the automotive industry is a key sector of the Canadian economy and, as several of my colleagues have already mentioned, it generates billions of dollars in economic activity. It accounts for 8% of Canada's manufacturing GDP.
It is important to note that the sector includes five world-class automakers that are supported by a network of 700 parts suppliers. Automotive companies directly employ more than 125,000 Canadians, primarily in Ontario, and support hundreds of thousands of additional jobs across the country.
Our automotive plants are internationally renowned for their high quality, thanks in large part to Canada's exceptional workforce. The Honda plant in Alliston and the Toyota plant in Cambridge both won the J.D Power Gold Plant Quality Award in 2024. On top of that, Toyota Canada won 22 awards between 1991 and 2024.
The auto industry is one of Canada's largest manufacturing sectors, and it is facing unfair, unjustified and inexplicable U.S. tariffs that are increasing production costs and threatening good jobs in this highly integrated market on both sides of the border. Since the signing of the auto pact in 1965, this industry has become increasingly integrated.
However, on April 3, 2025, the United States completely changed course and imposed a 25% tariff on all Canadian vehicles that do not comply with the rules of origin under the Canada-United States-Mexico Agreement, or CUSMA. The U.S. also imposed a 25% tariff on the value of non-U.S. components in CUSMA-eligible vehicles.
Additionally, on May 3, 2025, the United States imposed a 25% tariff on non-CUSMA-compliant auto parts. While not currently in force, the threatened tariff on auto parts remains. It is the uncertainty that is causing the biggest headaches for the industry. More recently, imports of medium- and heavy-duty vehicles were also targeted by an inexplicable 25% tariff.
Given that over 90% of vehicles manufactured in Canada are destined for the U.S. market and 40% of vehicles sold in Canada are assembled in the U.S., the impact of these tariffs is monumental.
Our government recognizes these significant challenges, and we will work closely with the industry, but I want to be clear: We will not sign just any agreement at any price. The agreement that will eventually be signed must benefit the industry. Our American friends need to understand that this industry is highly integrated and that any attempt to split it up will cause the industry to collapse, which will not be to anyone's advantage.