Linamar gets $101M in federal, Ontario funds for $507M expansion

Auto parts manufacturer has promised to create 1,200 jobs at its Guelph, Ont. plant over the next 10 years.

January 12, 2015   by The Canadian Press

GUELPH, Ont. — The federal and Ontario governments are handing over $101 million to a Guelph-based auto parts manufacturer that is promising to create 1,200 “high-quality” local jobs over the next decade.

Linamar Corp. has announced a $500-million expansion to its Ontario operations, with the Ontario government providing a $50.25-million grant and Ottawa contributing $50.7 million in the form of a repayable loan.

“There’s no shortage of regions that are willing to offer all kinds of incentives to companies,” Linamar CEO Linda Hasenfratz said at an announcement ceremony. “And I think it’s wonderful to see our governments stepping up and being competitive.”

Transport Minister Lisa Raitt said the federal loan will support the project to ensure that Linamar’s total investment of over half a billion dollars stays in Canada.

“Canada really is a great place to build cars, and our government is serious about supporting this industry and the well-paid, highly-skilled jobs that it represents,” she said.

The province’s grant to Linamar is the first from its 10-year, $2.5-billion Jobs and Prosperity Fund, said Premier Kathleen Wynne.

“This is an example of the kind of investment, the kind of partnership that we can enter into because of that fund,” she said. “The provincial and the federal governments both have a role to play in partnering and in making sure that growth can continue.”

Linamar said its $506.8-million expansion will focus on producing lighter, more efficient automobile transmission and power train parts. The $101 million from the two governments will be used to purchase new equipment and will fund research and development of new products, said Hasenfratz.

“The 1,200 additional jobs will be right here in Guelph, and that’s in addition to the existing jobs that will be protected,” she said. “The (government) funding is absolutely key to enabling the investment.”

The 50-year-old company – the largest employer in Guelph – already has 6,870 workers in Ontario, part of it’s global workforce of 19,000 in 12 countries.

The fact the federal and Ontario governments have worked to keep corporate taxes low was also a big factor in Linamar’s decision to expand in the province, as was the Conservatives’ push for more free trade agreements, added Hasenfratz.

“Our tax rate is a huge advantage, the lowest in the G7,” she said. “We have an increased focus on free trade, which I think is fantastic to open up new markets to Canadian companies.”

The province said its business grants are contingent on the company meeting investment and job targets.

“This is a significant investment in the future,” said Wynne.

© 2015 The Canadian Press

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2 Comments » for Linamar gets $101M in federal, Ontario funds for $507M expansion
  1. Daniel Rankin says:

    Glad to see it’s a loan and not corporate welfare. Also hope to see some trickle down of money to Linamar’s suppliers….you know the small businesses (fabrication shops) who don’t get a lot of incentives and breaks; and who take lots of risks (easily whipped out with a stroke of a pen), make their own plant investments, can’t afford expensive lobbyists , hire and train trades, work tremendous hours at probably less than minimum wage and struggle to get paid by the big guys!

  2. jane doe says:

    Also maybe now they can hire staff to fill in for breaks. So their 12hr shift workers can have the full 60 minutes worth of break times the government states we should. Instead of only 40 minutes worth 🙂

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