The document provides an overview of key trends in the automotive sector including: - Shifting production levels between the US, Canada, and Mexico from 2007 to 2018. - Growing electric vehicle sales, particularly in Norway due to substantial government incentives. - Issues facing the automotive sector in Ontario like rising costs of labor, hydro rates, and the potential impact of the USMCA trade agreement.

1. AUTOMOTIVE
SECTOR –
BY: PAUL YOUNG CPA, CGA
DATE: NOVEMBER 26, 2018

2. PAUL YOUNG - BIO
• CPA, CGA
• Academia (PF1, FA4 and MS2)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

3. SUMMARY
• Automotive sector is key area of the economy as it drives both consumer
spending as well as trade between Canada, USA and Mexico.

4. AGENDA
Source - http://business.financialpost.com/news/economy/canadas-reliance-on-foreign-financing-grows-as-exports-tumble
• 2008 vs 2018 Production
• Automotive Sales and Production Volume
• Plug-in Vehicle Sales – October 2017
• Ontario Plug-In Vehicle Program
• Norway / Electrical Cars
• NAFTA and Automotive

5. AUTOMOTIVE PRODUCTION
Source – Ward Automotive
2007
USA – 70.0%
CAD – 16.7%
MEX – 13.3
2018
USA – 63.9%
CAD – 11.6%
MEX – 24.5

6. AUTOMOTIVE SECTOR
Source - http://www.gbm.scotiabank.com/scpt/gbm/scotiaeconomics63/autoflash.pdf

7. ELECTRICAL CAR MARKET
• Source: https://cleantechnica.com/2016/06/05/electric-car-sales-increased-42-globally-q1-2016/ or https://www.theguardian.com/environment/2016/oct/13/electric-car-sales-set-to-pass-2m-
landmark-globally-by-end-of-2016

8. ELECTRICAL VEHICLE SALES
Source - https://insideevs.com/july-2018-plug-in-electric-vehicle-sales-report-card/ or https://www.desrosiers.ca/sales/ or
https://www.scotiabank.com/ca/en/about/global-economics/global-auto-report.html or https://insideevs.com/monthly-plug-in-sales-scorecard/
Total USA vehicle sales 17.1M or about 1.5% of new vehicle sales are electric

9. ELECTRICAL CAR
RAW MATERIAL
• Source - http://www.madehow.com/Volume-5/Electric-Automobile.html

10. ANATOMY OF ELECTRICAL CAR
• Metals – Steel, aluminum, nickel, copper,
• Rare Earths, vanadium, lithium
• Rubber
• Plastics,

11. ONTARIO PLUG-IN VEHICLES
Source - https://www.thestar.com/business/2017/12/03/ontario-will-miss-its-2020-
electric-vehicle-target-experts-say.html

12. NORWAY/ELECTRICAL CARS
Source - https://www.theguardian.com/world/2018/jan/04/over-half-
of-norways-new-car-sales-now-electric-or-hybrid-figures-show
Incentives:
• Tax Incentives - https://www.reuters.com/article/us-norway-budget-
autos/norway-seeks-to-trim-lavish-electric-car-subsidies-idUSKBN1CH1PQ
• Free Tolls (exempt) – $6,000/yr - https://www.reuters.com/article/us-autos-
electric-analysis/road-to-electric-car-paradise-paved-with-handouts-
idUSKCN1BW1AN

13. AUTOMOTIVE AND NAFTA
Source - http://money.cnn.com/2017/11/28/news/economy/trump-car-companies-nafta/index.html

14. ISSUES FACING AUTOMOTIVE / ONTARIO
1. Labour Laws (NDP/Liberals) - https://www.bnnbloomberg.ca/video/magna-takes-aim-at-ontario-over-the-cost-of-doing-
business~1172261
2. Carbon tax - https://www.thestar.com/business/2016/10/04/how-trudeaus-carbon-price-plan-will-affect-five-canadian-industries.html
“Truck and car plants don’t generate a lot of emissions, says Mark Nantais, president of the Canadian Vehicle Manufacturers’
Association, but some of their suppliers do and extra costs from a carbon tax would likely be passed along. That would hurt overall
cost competitiveness with the United States and could lead to new or expansion plants — and associated jobs ”
3. CPP Hikes - http://haroldalbrechtmp.ca/for-immediate-release-canada-is-bleeding-manufacturing-jobs-and-it-is-only-getting-worse/
4. Hydro Rates - https://www.theglobeandmail.com/news/national/high-electrical-costs-have-driven-thousands-of-manufacturing-jobs-
from-ontario-report/article36610740/ “Using existing economic studies, Mr. McKitrick said the report estimated nearly two-thirds of
the province's decline in manufacturing jobs since 2008 was due to elevated electricity prices, equalling about 74,881 jobs. Much of the
decline was in energy-intensive industries like the paper sector, iron and steel facilities, and automobile manufacturing.
5. 3-D Printing - https://www.mbtmag.com/blog/2017/09/3d-printing-revving-auto-manufacturing “While the industry isn’t ready yet to
offer on-demand cars, it is already showcasing next-generation models based on AM. Notable among them is a functional 3D printed
model of the class Shelby Cobra sports car, made up of 20 percent carbon fiber and 80 percent thermoplastic resin. Printed at the
Department of Energy’s Manufacturing Facility at Oak Ridge National Laboratory (ORNL), an estimated 75 percent of the vehicle’s
parts are produced by additive manufacturing. ”
6. Global Production Rationalization - https://www.thestar.com/news/canada/2018/11/25/gm-to-announce-no-product-allocated-for-
oshawa-plant-after-next-year-sources.html
7. USMCA content rules - http://canada.autonews.com/article/20181116/CANADA/181119781/usmca-content-rules-to-raise-production-
costs-automakers-warn

15. GM STOCK SALE Link - http://www.huffingtonpost.ca/2015/04/08/gm-
share-sale-canadian-government_n_7024464.html
Let’s see you quote Huffington Post, right? The article talks about
buying shares for investment purposes, right? Government do not
buy shares in companies that has never been their role.
Government can buy shares in companies as part of pension plans,
like CPPIB, but that is it.
Secondly, I thnk you need to educate yourself on the bailout. Why
was the bailout loans/shares done? It was done to help save
Chrysler and General Motors as part of the global meltdown. The
NDP that was under Layton made the bailout part of the stimulus
package, right? I guess you miss that part of the automotive deal,
right? http://www.theglobeandmail.com/try-it-
now/?articleId=16760149 or http://www.theglobeandmail.com/try-
it-now/?articleId=11167942. The bailout protected and saved jobs
until 2016 - http://www.bloombergview.com/articles/2014-12-
17/did-the-auto-industry-learn-anything-from-the-bailout.

16. GM STOCK SALEThirdly, the government of Canada was committed to bringing in a balance
budget as such made decisions with their investment holding and expense
management. You seem to ignore the fact government sets priorities, like
Martin did in the 1990s. Martin ran surpluses via cutting government
spending as well as taking money from EI. Yet, Harper makes a few
decisions with regards to investment then you call him and idiot, right?
Here are some factors from the government documents that for some
reason you did not read
1. 2009-2010 Budget - http://www.budget.gc.ca/2009/pdf/budget-
planbugetaire-eng.pdf - page 24 discusses the automotive loans -
Offering short-term repayable loans to the automotive sector in
collaboration with the Ontario and U.S. governments or page 82 The
Government, through EDC, has contributed almost $3 billion in short-
term loans to support the automotive industry in Canada.
2. GM file for bankruptcy protection as it restructured its business -
http://www.cbc.ca/news/business/car-giant-gm-files-for-bankruptcy-
protection-1.812398
3. Chrysler also filed for bankruptcy protection -
http://www.forbes.com/2009/05/06/chrysler-gm-fiat-bankruptcy-
opinions-columnists-nouriel-roubini.html
4. Ford never asked for bailout

17. GM STOCK SALE
What as the value the government recorded those shares on the financial
Statements?
http://www.thecanadianpress.com/english/online/OnlineFullStory.aspx?filena
me=DOR-MNN-
CP.ecd551301cb345bf829a8baced24da04.CPKEY2008111300&newsitemid=3
2623847&languageid=1
1. The government purchased the shares – “Late Thursday, a finance official
said the shares were initially booked at a value of $15.31 per share.:
2. The government sold the shares for what price?
http://www.bloomberg.com/news/articles/2015-04-06/canada-to-sell-final-73-4-
million-shares-of-gm-from-bailout. It seems there was gain on selling the sales.
3. Government records revenue and expenses as such if the government is going to
lose money on share offering then that would have meant a higher deficit. The
government made money off the share value.
4. Chrysler paid back the loans - http://www.cbc.ca/news/business/chrysler-
nears-7-5b-bailout-payback-1.1026704
5. GM - http://www.cbc.ca/news/canada/windsor/ottawa-doesn-t-regret-
gm-bailout-1.880819

18. GM STOCK SALE
Since 2009 lots of things have happen to the automotive sector – see below
information
1. Mexico is lead destination for new automotive investment -
http://www.slideshare.net/paulyoungcga/key-industry-and-market-indicators-for-
july-2015-canada-and-north-america-51666561 (See slide 9)
2. Canada’s input costs have risen in areas like Hydro -
http://www.ghy.com/tradelines-news/chrysler-ceo-tells-kathleen-wynne-hydro-
costs-making-ontario-too-expensive/
3. GM/CAMI - http://www.cbc.ca/news/business/gm-plans-560m-investment-in-cami-
plant-in-ingersoll-1.2954527
4. Chrysler Canada - http://www.cbc.ca/news/canada/windsor/chrysler-invests-2b-us-
in-windsor-plant-for-minivan-and-hybrid-1.2897611
BTW: What leader is talking that he is the champion of manufacturing, right? It seems
to me that Mr. Mulcair wants to raise corporate taxes for large corporation, right? What
are Toyota, GM, Chrysler, Ford, etc.? The aforementioned companies are not small!
http://www.cme-mec.ca/?lid=JCKNC-E742G-1W6JA&comaction=show&cid=HRH7K-
9UE34-ACUS8
FYI – I will not doing your analysis anymore for you. You make quick posts with a link
a few buzzwords, but no analysis to support your opinion. You expect me to read the
articles, right? Yet, you never read my links or information, right?

19. WHAT’S NEXT
• Investment into electrical hybrid cars - https://www.reuters.com/article/us-autoshow-detroit-ford-
motor/ford-plans-11-billion-investment-40-electrified-vehicles-by-2022-idUSKBN1F30YZ
• Automotive slow down and product rationalization - https://safehaven.com/commodities/industrial-
metals/The-Global-Auto-Industry-Is-Feeling-The-Trade-War-Burn.html
• Too many countries are imposing more taxation and regulations masked as they are helping the
environment when they are not. Govts around the world need to get their fiscal house in order
including taxation and regulatory processes.
• Donald Trump continues to look at ways to correct the trade imbalances with countries around the
world