Auto tariffs stoke layoff angst in Canada's once-proud Motor City

Calgary Herald

6 days ago

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An hour from Toronto, downtown Oshawa seems to exude the vibe of a pleasant small town. But signs of economic stress are multiplying in the place that once fashioned itself as Canada's motor city.
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Lines form early outside the food bank on Simcoe Street where customers load strollers with pasta and bags of bread. Homeless encampments dot the river trail. Inside local food joints like Ciao Amici, a lunch stop serving Italian specialties, conversations drift toward layoffs. On that front, there's a lot to talk about.
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Unemployment has surged in Oshawa and now tops 9%, one of the highest rates of any Canadian city. In May, shortly after US President Donald Trump imposed tariffs on automobiles, General Motors Co. said it planned to reduce output at the only Canadian assembly plant it owns that builds pickup trucks. The move affects some 700 jobs at the factory. Many more people will feel the ripple effects.
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As the Trump administration tries to pull more automotive jobs into the US, Oshawa's reckoning is a warning to other manufacturing cities.
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What's jarring for the residents of Oshawa is that, not so long ago, the city was on the way back. That GM assembly line near the shore of Lake Ontario died once, when the automaker closed it at the end of 2019. Then the Covid pandemic hit, demand for vehicles surged — and GM made the surprising decision to reopen the old plant.
Last year, about 150,000 Chevrolet Silverados were built here, according to the Automotive News Research & Data Center — many of them destined for dealers' lots in the US. That's the norm for Canadian auto assembly plants, which export most of what they build. But it's a two-way street. Walk around a Ford or GM or Chrysler dealership in Toronto or Vancouver or Calgary, and you will find more US-manufactured models for sale than Canadian ones.
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Canada, which has roughly one-eighth the population of the US, is the largest foreign buyer of American-made cars and light trucks. When parts are included, the US runs a trade surplus in automotive with Canada — a product of decades of tight integration between the countries. That system, however, doesn't fit within Trump's vision for the sector or for trade. In March, he reiterated his threat to use tariffs to 'permanently shut down the automobile manufacturing business in Canada. Those cars can easily be made in the USA!'