Toyota gets $100M in aid for Ontario plants

The federal and provincial governments have teamed up to provide $100 million in financial assistance to help expand Toyota's manufacturing operations in southern Ontario.

Toyota is investing a total of $421million in its Cambridgeoperations, considered among the most efficient auto plants in the world.

• Loss of Corolla doesn't have to be lethal blow for Canadian auto production
• Carmakers say adios to Canada as Mexico shifts into higher gear

The investment in advanced technology will set the stage for future models at the plants, which will lose production of the Corolla to a plant in Mexico by sometime in 2019.

Theprovincial Liberal government announced it will give Toyota a grant of up to $42.1 million, or 10 per cent of the project's cost.

The federal government will contribute about 14 per cent of the cost in the form of repayable $58-million loan.

Sources familiar with the announcement say it had originally been planned for next week, but was moved up to Friday because of the expected federal election call this weekend.

Gary Goodyear, minister of state responsible for the Federal Economic Development Agency for Southern Ontario, made the joint announcement Friday morningwith Ontario Economic Development Minister Brad Duguid in Cambridge.

Toyota Motor Manufacturing Canada Inc. has three plants in southwestern Ontario, with two in Cambridge that produce the Corolla sedan and the RX350 and RX450, and one in nearby Woodstock producing the RAV4 SUV.

Equipment and technology upgrades at the Cambridge plant will prepare the facility to produce the next generation ofLexusvehicles, a higher-quality vehicle than the Corolla, Toyota said. The exact models have not been announced.

The announcement earlier this year that assembly of the Corolla, a very popular car, was being moved put thousands of jobs in jeopardy in Ontario.

Toyota employs about 8,000 people in Ontario. Today's announcement means about 25 new jobs, the company said.

According to a news release from the Ontario government, Toyota will double the capacity of a new metal-stamping line at itsWoodstockplant where it will work with a range of high-grade steels and lightweight alloys. Lighter materials are important to improve fuel efficiency.

The investment will reduce the need to import parts and enable Toyota's Ontario operations to begin exporting to their U.S. plants.

But Canada's share of auto assembly is still waning.

According to DesRosiers Automotive Consultants, Canada's share of North American light vehicle production has slipped to 12.5 per cent this year, from 14 per cent last year.

Last fall, Ontario provided an $85.7 million loan to help with Honda's $857 million expansion of its manufacturing facilities in Alliston, north of Toronto.

The Canadian Taxpayers Federation called the cash for one of the world's most profitable corporations a "cruel joke on taxpayers" and criticized the federal loan made on the eve of an election campaign as a bid to win over voters in southern Ontario.