Governments commit $2.5B to automotive sector amid tariff pressures

The federal and Ontario governments have announced an additional $2.5 billion in funding for large-scale automotive projects as part of a broader economic package designed to strengthen manufacturing and protect workers from U.S. tariffs.

The investment includes up to $1.5 billion from Ottawa and up to $1 billion from Ontario over two years. The governments said the funding will help automotive companies adapt to changing economic conditions, maintain jobs throughout the supply chain and support production of connected and electrified vehicles.

The announcement builds on automotive sector supports unveiled earlier this year through Canada’s national auto strategy, including funding for assembly operations and parts manufacturing.

The governments also said Canada’s light-duty vehicle greenhouse gas fleet-average standard will remain at 2026 levels through 2029, providing automakers with additional flexibility while the industry navigates trade-related pressures. Annual increases are scheduled to resume with the 2030 model year.

In addition, Ottawa and Ontario will establish a Canada-Ontario Automotive Task Force to oversee implementation of automotive sector measures and support industry competitiveness.