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Has Canada Just Jump-Started its Electric Vehicle Sector? – A Look at the Recent Ford Canada Labor Deal Through the Prism of an Integrated North American Value Chain

From a U.S. perspective, arguably the biggest news in the critical minerals sector in recent weeks has been U.S. President Trump’s latest executive order on critical minerals, which, according to analysts, is the first one in this field “that has the potential to bring some meaningful changes.”

Aside from calling on the Department of the Interior to invoke the Defense Production Act to expand and strengthen our domestic mining and processing capacity, the order directs agencies to “prioritize the expansion and protection of the domestic supply chain for minerals and the establishment of secure critical minerals supply chains,” and to direct agency resources accordingly, to ensure that these “do not depend on resources or processing from foreign adversaries.”

In its effort to secure U.S. supply chains, the U.S. will, among other things, leverage “cooperation and coordination with partners and allies, including the private sector” — an area into which the Trump administration has made forays in recent months with the signing of various cooperative agreements on critical minerals with Australia and Canada.

The recently agreed-upon three-year labor deal between Unifor, the labor union that represents Canadian autoworkers, and Ford Motor Company of Canada Ltd, must be viewed in this context.

Under the agreement, Ford will spend nearly $2 billion on its Canadian plants, including $1.8 billion toward the production of five electric vehicle models in its Oakville, Ontario plant, with production starting in 2025. The governments of Ontario and Canada, respectively, are contributing $295 million for a total spend of $590 million, towards retooling the Oakville EV plant.

According to news reports, the upgrade of the plant will elevate Oakville into Ford Motor Company’s No 1. electric vehicle factory in North America.

During the contract negotiations leading up to the agreement, in what constitutes a clear acknowledgment of the strategic importance of controlling the entire supply chain, Ontario’s premier Doug Ford made clear that the province was willing to invest to not only assemble EVs, but to also have battery manufacturing done in Ontario.

The Canadian federal government’s investment into EV technology ties into its post-pandemic recovery plan. As Innovation Minister Navdeep Bains wrote earlier this fall in Policy Options magazine:

“With Canada’s natural resources and skilled workforce providing a competitive advantage, we absolutely must support the development of the next generation of battery supply chains, right here in Canada. The ability of Canadian industry to pivot quickly has been on display since the outset of the COVID-19 pandemic. In a matter of months, Canadian manufacturers were able to retool their existing production lines and set up new manufacturing facilities to produce much-needed PPE and other critical supplies. There is no reason we cannot see the same kind of rapid retooling of existing facilities – and eventually the construction of new ones – to take on the manufacture of battery materials. Doing so would provide positive results across various sectors, including mining and critical minerals, automotive and bus manufacturers, research and development — all of which drive economic growth.”

Now that the new U.S. Executive Order has declared a critical minerals “national emergency,” we will see whether Canada’s actions in the EV sector find an echo on the U.S. side of the border — and one that draws on the collective strengths of two of the world’s most technologically advanced democracies.