According to a recent report by the Trillium Network for Advanced Manufacturing, a non-profit think-tank affiliated with Western University, there has been a decline in vehicle production in Canada over the past decade. While the Detroit Three automakers, including Ford, Stellantis, and General Motors, have reduced their manufacturing output, Japanese car manufacturers have maintained a steady presence in Canada.
In 2016, Canada produced 2.3 million cars, but by 2025, this number dropped to 1.2 million. The decrease in production is mainly attributed to lower output from the U.S.-based automakers, with the Detroit Three accounting for 56% of Canadian car production in 2016, which decreased to 23% in 2025. On the other hand, Japanese automakers like Honda and Toyota saw an increase in their share, rising from 44% to 77% during the same period.
Furthermore, the employment landscape in assembly plants reflects a similar trend. Jobs with U.S.-based automakers declined from 60% of all assembly employment in Canada in 2015 to 38% in 2024, while jobs with Japanese companies increased to over 60% by 2024.
Brendan Sweeney, the managing director of the Trillium Network, highlighted the shifting priorities of U.S. and Japanese automakers in Canada, emphasizing a long-term move by American companies away from the country.
Popular models like the Honda Civic and Toyota’s Rav 4, which are in high demand in North America, have contributed to the sustained production by Japanese manufacturers in Canada.
In recent developments, GM announced the discontinuation of its BrightDrop electric delivery van production in Ingersoll, Ont., and the reduction of a shift at its Oshawa plant, potentially affecting 1,200 auto workers.
Stellantis and Ford have also undergone plant closures for retooling in Brampton and Oakville, respectively. While the retooling process has been paused at the Brampton facility, it continues as planned at the Oakville plant.
Industry Challenges and Tariffs
The auto industry in Canada has faced challenges, including the impact of tariffs imposed by U.S. President Donald Trump, with Canadian-made vehicles subject to a 25% tariff. However, Sweeney noted that U.S.-based automakers were already scaling back their production in Canada before the imposition of tariffs.
Brian Kingston, CEO of the Canadian Vehicle Manufacturers’ Association, emphasized that the report may not fully capture the contributions of the Detroit Three to research, development, and auto parts production in Canada.
Despite the challenges, there are positive signs such as investments in battery manufacturing plants and retooling of facilities by U.S.-based automakers, indicating a commitment to Canada.
With the federal government expected to release an automotive strategy soon, stakeholders like Sweeney and Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, advocate for incentivizing companies investing in Canadian auto production.
Volpe suggested that offering incentives could be a proactive approach in light of the current trade dynamics. As the industry continues to evolve, maintaining a balance between incentives and regulations will be crucial for the future of auto manufacturing in Canada.