Mr. Speaker, it is an honour to rise on behalf of the great people in the great riding of Vaughan—Woodbridge.
This is my first opportunity to rise in the House of Commons following the tragic and devastating news coming out of Tumbler Ridge, British Columbia. Like many people in the House, I have to say that as a father it is hard to even imagine the pain and the suffering that these families are going through. As we all know, there are no words we could say that would truly offer comfort. However, I would like to say the people of Vaughan—Woodbridge are thinking of these families. Our love is with them. We stand with them, and our prayers will be with them.
It is an honour to rise today to speak about the auto industry. Canada has been building automobiles for over a century. From Windsor to Oshawa, from Brampton to Sainte-Thérèse, there are generations of skilled workers who have worked in the auto industry. We have tradespeople, engineers and plant workers. These people have been the heartbeat of Canada's great automotive sector, one of the greatest automotive sectors in the history of the world. Our automotive industry really does represent the best of Canadian innovation and manufacturing prowess. It is home to some 600,000 indirect and direct jobs, and it has a GDP of $16 billion.
Before coming to Parliament, I spent my career in the steel industry, in the steel service centre business, which is nestled right in the automotive supply chain. I have had the opportunity to work with many great people, those who work on the factory floors and those in the offices that support these workers. These people represent the best of what it means to be Canadian. These people do not work for fortune or for fame. They strap on their boots every single day to go to work to ensure that their children have a better life than they did. They work to ensure our country is better off than it was before. These are the very people who represent the ideals of Canadian identity.
It is unfortunate that we often think just about the numbers and the statistics, the GDP and the job numbers. The numbers represent these people, and they truly represent what it means to be Canadian: that work, that discipline, that ethic.
Unfortunately, our auto industry and the industry associated with it has been in decline for many years. I witnessed this first-hand in my time working in this industry. I remember when I first started in the steel business, I was at a conference and someone asked a major auto parts supply manufacturer why their company no longer invested in Canada. The response was that other countries roll out the red carpet, but Canada seems to want to roll out the red tape.
It is no surprise that over the past 10 years we have witnessed a sharp decline in the number of automobiles manufactured in our country. It is an almost 50% decline, from 2.3 million vehicles to roughly 1.2 million vehicles. Some of this obviously has to do with the natural process of globalization, but most of it has been the result of some major structural issues facing our economy. These issues have led to a negative business environment so astounding it is actually approaching the point of miracle. We now have some 320,000 different federal regulations, with over 105,000 regulations on the manufacturing sector alone.
At the Standing Committee on Industry and Technology, we heard over and over again from people in the automotive sector when we had our emergency study that some of the major barriers to the prosperity of the industry are the regulatory environment and some of the tax framework issues that are preventing capital from being spent on capital projects in this country and driving capital outflows to places like the U.S. and Mexico. This is where we start to see the divergence between capital outflow and FDI into Canada.
All of this was long before the unjustified tariffs that have been put in place by U.S. President Trump. These tariffs, as I have said many times in the House during debates on the auto sector and at committee, are certainly the catalyst in the industry, but they do not explain the decades' worth of decline in this sector.
It is very understandable why Canadians find tariffs not only intellectually reprehensible but morally repugnant, because many of us, if not all of us, looked at the U.S. not only as an economic partner but as a cultural partnership. Many of us have family connections in the United States. It is almost as if a family member has stabbed us in the back. The ties between the U.S. and Canada run deep.
We have also heard the U.S. President take aim at our auto sector, saying that he wants to relocate the Canadian auto industry back to the United States. That attack does not just threaten jobs and GDP; it is an attack on what it means to be Canadian. It is an attack on the hard-working person who straps on their boots every day.
These attacks, although vicious, have provided us with an opportunity, because as a mature country, Canada must begin to think for itself. It is no secret that for decades at this point, we have outsourced our economy and security to the United States. While we cannot control what it does, we can certainly fix what we do here at home.
Earlier this month, the government unveiled its new auto strategy, within which it finally repealed the EV mandate, which we welcome and have been arguing for. Of course, that target was always unrealistic. We heard that time and again from industry leaders and experts. It is nice that it has listened to the Conservatives and removed this policy.
That said, I am worried it is trying to back-door it through an excessive regulatory framework and I certainly have questions around it. For instance, 80% to 90% of the vehicles we manufacture are exported, and 90% to 92% of those exports are directly targeted at the U.S. What will the costs associated with these regulatory measures be? How will that hamper or bolster competitiveness? Are the Americans adopting this standard, because as we know, we have a lot of cross-border interactions in the supply chain. Certainly, we cannot have one without the other.
The centrepiece for the government's auto strategy is this new five-year, $2.3-billion EV affordability program, offering $5,000 in rebates for vehicles under $50,000 for which Canada has a free trade agreement. The difficulty for me on this is that the vast majority of EVs sold in Canada are not actually built in Canada. We currently assemble one fully electric vehicle that qualifies under the new rules, the Dodge Charger EV in Windsor. Meanwhile, the long list of eligible vehicles for this initiative are from foreign countries.
This is where I question if this strategy was actually fully thought-out, because Canadian taxpayers will be subsidizing electric vehicles that are made in the United States while the U.S. is threatening our auto industry and displacing our workers. At the same time, the American President has said he wants to attack one of the industries that really represents the identity of what it means to be Canadian. We have already lost 5,000 jobs in this sector. What I cannot understand is why we are rewarding the Americans for this. It makes no sense. My colleague, the shadow minister for industry, asked the Minister of Industry this exact question at committee and she had no answer.
We know that less than 5% of the vehicles built in Canada will qualify for this program. That means the majority of the $2.3 billion will flow to foreign manufacturers. What kind of message does this send to workers? What kind of message does this send to the auto workers in Brampton who are supposed to build the Jeep Compass? How do we explain this to the 1,200 former employees in Ingersoll who are now seeing more than half of their lump-sum severance taken away in tax? Under section 153 of the Income Tax Act, the minister has the regulatory authority to reduce withholding rates so that workers can access more of this money.
We hope the government will support us in our approach to build here, so we can—