Feds earmark $100M in 2015 budget to drive auto innovation

Program will encourage R&D and technology demonstration on a cost-shared basis with industry partners.

April 22, 2015   by PLANT Staff with files from The Canadian Press

OTTAWA — Canada’s automotive sector wasn’t left behind in the 2015 Federal Budget, which gave manufacturers in general a few reasons to be happy.

The Automotive Supplier Innovation Program will provide $100 million over the next five years to encourage auto suppliers to develop innovative processes and products.

Of this amount, $50 million over three years, starting next year, will be reallocated from the Automotive Innovation Fund and new resources of $50 million over two years will be provided starting in 2018–19.

The government said the program will help R&D projects reach the commercialization stage by supporting product development and technology demonstration on a cost-shared basis with industry partners.

The Canadian Vehicle Manufacturers’ Association (CVMA) said the measures recognize the need for the auto industry and its suppliers to be competitive and address future challenges through the research and innovation.

The program, it said, will address the critical gap in support for industry-based product development that lies between the basic research conducted in universities and fully-commercialized products in the marketplace.

“Increasing the pace of innovation throughout the vehicle supply chain is essential as we strive to double the fuel economy of the light duty vehicle fleet by 2025, along with the added demand for enhancements to vehicle safety and connectivity,” said Mark Nantais, CVMA’s president. “Developing innovative solutions will attract product development activities and provide high technology jobs in all segments of the Canadian auto industry and its entire value chain.”

The 2015 Federal Budget gave manufacturers plenty to chew on, including a renewed capital cost allowance program, research spending and a small business tax cut.

“To counter the volatility in the resource sector, the government has made clear that the future health of Canada’s economy depends on a strong manufacturing and exporting sector,” said Jayson Myers, president and CEO of Canadian Manufacturers & Exporters in the association’s annual budget summary.

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