Open this photo in gallery: An employee works on the line at automaker General Motors Brightdrop unit's CAMI EV Assembly in Ingersoll, Ont., on Dec. 5, 2022.Carlos Osorio/Reuters Canada’s automotive industry needs to become more Canadian. The hope across the sector is that U.S. President Donald Trump will back down on the 25-per-cent tariffs he has slapped on vehicles and parts made in this country, and cross-border trade will get back closer to normal. Nobody within it wants to see Canada try to turn its back on the U.S. market, access to which has been one of the biggest selling points for automakers with assembly plants here, and is where the vast majority of Canadian-made auto goods have been sent. But interviews this week with sectoral leaders and experts reflected awareness that, at best, uncertainty will hang over the relationship for at least the rest of Mr. Trump’s presidency. And trust built up over six decades of continental manufacturing integration may never be fully restored. That means a strong case for industrial policy to help make the Canadian sector more resilient and less wholly reliant on the United States. “We’re going to have to imagine an industry that’s less dependent on the U.S. market, but never separate from the U.S. market,” was how former Unifor economist (and now director of the Centre for Future Work) Jim Stanford put it. With limited overseas export potential, it would largely entail doing more to connect Canadian production to Canadian interests – leveraging the power of this country’s large consumer market, maximizing the domestic value of every vehicle produced here, finding synergies with other Canadian industries. There are many ways that the next federal government could try going about that, after the April 28 election, some of which have been hinted at on the campaign trail. Few of them are quick fixes, and for those currently working in the industry, it’s difficult to look past the immediate crisis. But from their insights about how the sector works and what more it could do, it’s possible to piece together a longer-term plan with five key cornerstones. 1. Getting Canadians to buy more Canadian-made vehicles Canada is a top-10 market for car sales, which should advantage production here, but hasn’t much of late. Per data compiled by the Trillium Network for Advanced Manufacturing, well over 80 per cent of the 1.5 million vehicles assembled in Canada in 2023 were exported to the U.S., which is now an obvious liability. But only about 12 per cent of the 1.7 million cars bought by Canadians that year were Canadian-made, which represents an opportunity to make up some ground. That could involve offering incentives to buy Canadian, such as a GST break proposed by NDP Leader Jagmeet Singh and Conservative Leader Pierre Poilievre. But it would also be a matter of getting automakers to use Canadian facilities to make cars that Canadians want. A challenge is that most assembly plants only produce one or two models, and the market demands greater variety than that. So one option that Ottawa and Ontario (home to all the plants) might consider is incentives or subsidies for automakers to invest in more flexible platforms to produce multiple vehicle types. Another lever emerged this week when Ottawa announced that automakers would get a break from Canadian countertariffs on U.S. imports if they maintain production here. Although it’s now being used defensively against Mr. Trump’s efforts to pull production from Canada, University of Toronto professor and auto-sector historian Dimitry Anastakis noted that the mechanism – known as duty remissions – was previously deployed as a way to convince automakers without a Canadian presence that if they want to sell here, they should manufacture here. That happened most recently in the 1980s, when Ottawa waived tariffs for Japanese automakers setting up camp. Economic nationalism of that type has since fallen out of vogue. But it could be re-explored amid the U.S.-led breakdown of international trade law, if Ottawa wants to press companies beyond the five making cars here (Toyota Motor Corp. TM-N, Honda Motor Co. HMC-N, Stellantis NV STLA-N, Ford Motor Co. F-N and General Motors Co. GM-N) to establish a Canadian presence. 2. Getting government to buy more Canadian-made vehicles, too A source of frustration for the Canadian sector has been governments’ and Crown corporations’ unwillingness to use their purchasing power to support domestic products. Canadian Vehicle Manufacturers’ Association president Brian Kingston cited reluctance by Canada Post to purchase BrightDrop electric vans – made by GM at an Ontario assembly plant where production was recently suspended – as a prime example. Part of the reason governments haven’t prioritized buying Canadian has, again, been fear of running afoul of trade rules that now don’t carry quite the same weight they once did. Other considerations, not least value for money, can hardly be set aside. But Ottawa could now adjust procurement policies to strongly favour Canadian-made vehicles when they’re competitive with other options, and work with other levels of government – particularly municipalities, which buy a lot of cars and trucks – to nudge them toward doing likewise. 3. Getting more Canadian-made parts into Canadian-assembled vehicles Hundreds of Canadian parts makers and suppliers of assembly-line equipment clustered in southwestern Ontario are the industry’s lifeblood, employing far more people than the carmakers they serve. More than half of Canadian-made parts currently go toward assembly in the U.S., according to more data gathered by Trillium, meaning that many of these companies face a perilous future. But they account for little more than a quarter of the content of vehicles assembled on this side of the border, suggesting another area where there’s room to boost domestic sales. “Local suppliers have the capacity to manufacture the entire range of parts that make up a vehicle here in Canada,” said Automotive Parts Manufacturers’ Association president Flavio Volpe. “The challenge is how to get them Canadian contracts while they manage losing American ones.” One way that Ottawa could help would be providing subsidies or tax incentives to suppliers for capital investments that allow them to compete for more clients in Canada. That could involve expanding product lines to meet more needs, and investing in technologies to boost productivity – particularly since it’s otherwise difficult for companies now worried about their day-to-day survival to make relatively long-term capital commitments. That sort of support is what Liberal Leader Mark Carney was getting at with a vague campaign promise of a $2-billion fund to boost the domestic supply chain, though it’s doubtful that would be enough. 4. Doubling down on EVs Despite bumpiness in the transition to electric vehicles, it’s where virtually everyone in the industry thinks the global market is going. That means opportunity for Canada – not just because access to this country’s mineral reserves is a draw for EV battery-making, but also because it could align with ways the sector needs to change. The disruption of manufacturing processes and supply chains means chances for new relationships between parts makers and domestic assembly plants. The relative simplicity of EV design could lend itself to assembly plants using flexible platforms to produce a wider variety of vehicles. And that’s not to mention the chance to develop new, potentially exportable technologies for the rapidly evolving industry. One way for government to help with that would be by bolstering the domestic EV market. That could involve the return of purchase rebates – perhaps tied this time to EVs’ domestic content, as the U.S. did under former president Joe Biden – as well as continued investment in charging infrastructure. And for any subsidies Ottawa disperses for capital investments, by either carmakers or their suppliers, it makes sense to prioritize EV-related production wherever possible. 5. Empowering the sector to meet other industrial needs There are big coming opportunities to diversify client bases of companies in the automotive supply chain, in ways aligning with their infrastructure and skill sets. That includes sectors ranging from mining to health care machinery. But the most intriguing current example might be defence, for which the next government will almost certainly dramatically increase spending. That could mean all sorts of domestic manufacturing opportunities, such as beleaguered automotive suppliers serving military-vehicle production. But it’s not as simple as just awarding contracts. In addition to any support for related capital investments and skills training, Ottawa would likely need to help with navigating security certifications and vetting. None of that would be enough to replace all the automotive work currently in jeopardy, because of volume differences. (Supplying a small number of customized military items is not the same as supplying hundreds of thousands of cars.) Saylo Lam, who chairs the Canadian Association of Moldmakers, said that these sorts of contracts could be good gap-fillers for assembly-line equipment makers; parts producers, not so much. But one of the advantages of having a domestic auto sector is that it provides the capacity to fulfill other manufacturing demands as they arise. That may particularly be the case now, as Canada tries to broadly become more self-sufficient amid globalization’s possible decline. So there will be good reason for Ottawa to enable the industry to meet those needs – and to take the other steps needed to help it survive the coming years and perhaps emerge as something stronger.