Mr. Speaker, I will be sharing my time with the member for Kingston and the Islands.
I am pleased to rise in the House of Commons today to speak to the future of the Canadian auto industry and the measures our government is taking to ensure its long-term success.
The Government of Canada fully understands and recognizes the importance of our auto industry, a key driver of our economy that relies on thousands of dedicated workers and generates $16 billion in economic activity every year. This sector is and will remain an important part of the Canadian economy.
With a world-class workforce, Canada's auto sector is building the vehicles of today and will help build the vehicles of tomorrow. It provides quality jobs that define communities and make Canada a trusted partner in global manufacturing.
The auto sector is facing very strong headwinds. The industry is under immense pressure. Let us be clear: This pressure stems from the U.S. tariffs on vehicles, which are driving up costs and creating uncertainty in the North American market. That market is deeply integrated, by the way.
Let us be clear. This is happening as a result of policies put in place by the U.S. administration, which has very clearly indicated that it wants to bring all car manufacturing back to the United States. No, we are not going to sign any old agreement with the United States. We are going to ensure that we secure an agreement that will minimize tariffs and ensure the long-term survival of this industry.
Since the government fully recognizes how important this sector is to the Canadian economy, it reacted quickly to the tariffs, which are obviously unjustified, illegal and, more importantly, counterproductive, even for the Americans.
As I said at the outset, the industry is highly integrated in North America. U.S. tariffs are having a negative impact on American companies based in the United States. We also have retaliatory measures, countermeasures, to try to force our American friends to make some changes. This measure has been supplemented with a performance-based duty remission framework to protect Canadian production. Under this framework, Canadian auto manufacturers are able to import CUSMA-compliant U.S.-assembled vehicles duty-free, provided that they maintain production in Canada. That is very important. They have to maintain production in Canada, or they are not eligible for remission.
The Government of Canada is taking proactive steps to position the sector as a leader in manufacturing next-generation vehicles. On February 5, the Prime Minister launched a new automotive strategy to transform Canada's auto sector in the long term. This strategy aims to ensure that Canadian-built vehicles create good Canadian jobs and a strong Canadian market. This means that we need to strengthen our domestic manufacturing presence, and we need to start by investing in the transition to manufacturing EVs and connected technology. We will then need to diversify our export markets, because the future of our industry depends on EVs and export diversification.
Recognizing that the future of the industry lies in electrification, we are building on our free trade agreements with 51 countries, which give us access to more than 1.5 billion consumers around the world, to attract new investment and diversify our export markets.
We are supporting major investments in auto manufacturing and helping businesses adapt, grow and diversify by allocating $3 billion from the strategic response fund and up to $100 million from regional tariff response initiatives.
With a view to bolstering domestic production and supporting long-term competitiveness, we have launched public consultations to strengthen Canada's automotive remission framework. We have launched consultations. We are in constant discussions with the industry to determine the best way to ensure its long-term viability. We are aiming for a performance-based tool that is designed to protect Canadian workers, strengthen supply chains and position Canada as a destination of choice for automotive investment.
Our top priority is strengthening the domestic market for the vehicles of the future. The new five-year EV affordability program offers incentives of up to $5,000 for battery electric and fuel‑cell electric vehicles and up to $2,500 for hybrid cars. We believe that EVs are the future of the automotive industry. To ensure the industry's long-term viability, we must be part of this market.
We are lowering costs for Canadian families and businesses while ensuring that Canadian-made vehicles have a clear advantage in the domestic market by exempting them from the $50,000 transaction cap.
We are also providing long-term certainty regarding our path to reducing greenhouse gas emissions, because the reality is that GHGs exist and that they are harmful to both our physical health and our economic well‑being. We are introducing new, more stringent Canadian GHG emission standards for model years 2027 to 2032 to drive emission reductions in a technology-neutral manner.
In addition, we will repeal the electric vehicle availability standard and focus instead on the outcomes that matter to Canadians without placing an undue burden on Canadian industry.
This strategy is about vehicles and manufacturing, but most importantly, it is about workers. We are introducing a new work‑sharing grant to prevent layoffs and support worker retention. We are investing $570 million in employment assistance and reskilling supports for up to 66,000 workers, including auto workers who may have lost their jobs.
We are also establishing a new workforce alliance of industry, labour and training partners to address bottlenecks and catalyze private investment. Canada has a highly skilled workforce, critical minerals, abundant clean energy, and a proven track record of innovation.
Canada understands and supports the auto industry, and the future of the auto industry lies in electric vehicles.