Chambers discusses the auto sector with Vassy Kapelos on CTV's Power Play

Added: 2026-05-09

[00:00:00]Adam Chambers is the Conservative trade critic.

[00:00:03]>> Hi, Mr. Chambers. Pleasure to welcome you back here in studio. I appreciate making the time.

[00:00:06]>> Great to be here and happy birthday.

[00:00:07]>> Oh, thank you. So, somebody informed you. Okay. Thank you very much. Um, you described this decision as reported um out of Japan by Honda as an indictment of the government's auto policy this morning as the the news was surfacing.

[00:00:20]How is declining demand for EVs the Canadian government's fault?

[00:00:25]>> Sure. So I think it's important to look at what the the timeline of how we got to this day. First, you know, it's obviously it's a very difficult day to be an employee in the auto sector and of course when you you wake up and you see that your employer has made an announcement like this, people are concerned about their jobs. Um what the government's auto policy has been for the last number of years was to bet very big on the electric vehicle segment becoming uh much bigger than it currently is. So, you're correct. Demand is down for electric vehicles. But when the government put subsidies in the window for Canadian manufacturers to build electric vehicles, that actually caused some OEMs, including Honda, to move some of the traditional manufacturing outside of Canada and into the US because they were going to make room for their electric vehicle manufacturing lines. Now that demand is not there for electric vehicles and there is some uncertainty about access to the US, these companies are rethinking their allocation decisions.

[00:01:29]Therefore, the fact that the government offered very large subsidies caused them to move the traditional uh manufacturing outside of Canada and now they've made a decision to pause or delay and in this case cancel uh their plans to build electric vehicles as they originally intended. But that focus on EVs at the time and those subsidies were not made in a vacuum. Like I remember it very clearly. The discussion at the time was Joe Biden is putting in the window a brand new industrial policy policy rather me to center development there on electric vehicles. If we are to compete and we should want to compete because we have access to critical minerals that are so essential for the construction of these batteries then we have to figure out a way to do so. Like that was why the not just the federal government who are Liberals, but the Conservative government in the province of Ontario decided at the time to offer those subsidies. It wasn't like we're going to bet big on this thing because hey, maybe it works out. It wasn't in a vacuum.

[00:02:26]>> Well, I would say I think this is the danger of when you're competing uh with other countries on subsidies. uh if if these plants or if these decisions or these subsidies were not offered by the federal government to retool a factory to build electric vehicles, which demand ended up not being where people projected. If those subsidies were not offered in the window, those manufacturing lines likely would not have moved.

[00:02:52]>> So, you don't know that.

[00:02:53]>> You don't know that. Okay, it's possible they wouldn't have moved. Uh but what we guarantee today is that they're not building electric vehicles here as the government projected or hoped that they would. So I think that the government's singular focus on electric vehicles has blinded them from acknowledging the reality of the demand side equation and a risk that if the demand wasn't there that these electric vehicles wouldn't get made. But do you think like do you know for a fact that it's because of a focus on EVs or companies who at the time also shared that focus because they thought the market was going in a certain place that that is the reason that that other type of production left because the evidence that we have so far or at least the comments from these companies is that it is largely in response actually to the threats from Donald Trump and the tariff environment from Donald Trump. It's not like any of them have said, "Well, you know what? The Canadian government forced our hand. We got to make EVs, so we're taking our stuff elsewhere."

[00:03:51]>> Yeah. Nobody said they had to make EV EVs. But when you subsidize greatly or offer incredible incentives, as the government did to make EVs, that would cause a company to rethink their production allocation decisions. So, >> don't you think they were rethinking it already though, to be fair, pardon the interruption, but like they were looking at the demand for EVs worldwide at the time, too, and they were retooling their production to meet that demand.

[00:04:13]Absolutely. There's no question about it. But the fact that their decision to retool their facilities in Canada and move traditional manufacturing out put us at risk because if electric vehicles did not take off as they haven't and they might eventually, but I think what we're suggesting is, and by the way, we should not allow, you know, President Trump to skate off here without any kind of criticism. His tariffs have thrown the entire industry into a tail spin and chaos. You know there is I think the top total tariffs paid by the auto sector in Canada is five over $5 billion and counting every single month. So that creates an uncertain environment. The demand reduction for electric vehicles is another uncertainty. Government policy which by the way did not favor hybrids for a long time. They hybrids did not count or were not supposed to count in the government's policy. And now the government also decides to allow 49,000 Chinese electric vehicles into the market, which in theory will eat away at the number of EVs that Canadians would buy anyway. So now you have uh another competitor in the market that will likely undercut Canadian production. You have demand that's not there. So I think the companies are making kind of realistic decisions about hey, you know, we have to decide where we're going to uh produce our vehicles. And right now electric vehicles vehicles is not where the market is going.

[00:05:39]>> So, so what's the suggestion? Because inherently like the federal government, you know, in putting forward their auto stat strategy and continuing to center it on EV say like this is about the long-term viability uh of of the industry as a whole. And as you put it off the start of this interview, there are tens of thousands, hundreds of thousands of people employed by that industry who are very worried about the prospect of not making cars in any in any capacity. EVs, hybrids, regular ones, whatever you want to call it. So, what is the alternative? What are you proposing that the government do?

[00:06:10]>> Well, I'm glad you asked about proposals because we've had a couple. One was to take the GST off of Canadian assembled vehicles, which I think would support all of those jobs that are currently in Canada at these assembly plants. Number one. Number two, when the government uh reannounced its auto strategy, uh it included a ve fairly heavy rebate for Canadians to purchase electric vehicles.

[00:06:33]That rebate will allow Canadians to purchase foreignmade electric vehicles in including vehicles, electric vehicles made in the US. In the current environment with Donald Trump is tariffing Canadian vehicles to get into the US, it doesn't re in my view, it doesn't make sense for the Canadian government to pay Canadians to purchase an Americanmade vehicle or an electric vehicle from another country. Why don't we support the assembled made vehicles here in Canada which would be taking the GST off as one idea?

[00:07:03]>> I understand the in principle that is is it in reality something that will serve the market like is there enough capacity there or production at this moment to serve the market and do you risk in sort of saying no to big US automakers who are supposed to be you know our partners over the border you know in crossber activity um sort of further alienating them and sending them even more of them south. Well, I would say that the GST proposal that we had suggested to take the GST off of Canadian assembled vehicles wasn't just for Canadian assembled electric vehicles. Our proposal is to take it off of any Canadian assembled vehicles. So, I think that would include any, you know, any of the OEMs, including the the Japanese automakers plus the the Detroit 3 who are are building cars here. And then, frankly, anyone else who wants to show up and actually build cars here. We should be paying using government money to reward Canadians for purchasing uh Canadian assembled vehicles. you know, the government had talks about buy Canada a lot. I mean, this would be an exact uh, you know, fit in exactly with that kind of strategy.

[00:08:01]>> Is that in congruent though with what you started off saying, which is that subsidization is what led us down the wrong path? I mean, essentially, you're saying like the government interfering in the market is what created the the story that we're covering today. You want more sub subsidies to now solve that?

[00:08:15]>> Well, I think what we're we're offering is an alternative to the government proposal. The government said that they're going to spend 2.3 billion on subsidizing the purchase of electric vehicles. We said, well, look, why don't you take that money and take it off, take the GST off of Canadianmade vehicles instead, as an example. Uh, and I would say uh in the current moment, the industry is in need of some support.

[00:08:37]There have not been substantive discussions uh on KUSA for some time. In fact, autos has not really been discussed for a lot of those discussions even when they were going on. So, the auto sector is in a period of, you know, uncertainty. We want to, I think, reward Canadians for supporting Canadian assembled automobiles and send a message to the Americans that, you know what, we have an auto sector here. You know, we used to build 2 million cars a year, 2.2 million cars a year in 2015. And that number is down by 50% now or 50% larger excuse me this the size of the sector is 50% as it was uh in 2015. So 1.1 1.2 million cars.

[00:09:21]We need to say uh we're a big market. We purchase 2 million vehicles a year. We only are selling and building 1.2 million. There's capacity for the Canadian auto market to exist in North America. But the suggestion that the government has that Canadians will now build cars for export around the world is probably an unrealistic objective, the only market that we can realistically send our vehicles to is in the United States.

[00:09:49]>> Do you think that's thinking small though? Look, I understand from a logistics perspective at this moment in time, but if we are to be ambitious and hope for diversified exports and not to land in this position 20 years from now, shouldn't we at least be trying to put a p plan in place that allows for that possibility?

[00:10:03]>> Sure. I I think thinking big is always a good idea. The US market is incredibly large. Uh we should recognize that that is the most likely destination. I have yet to see any true economic stats from the government that support the notion that Canadian-made electric vehicles are competitive in a place like Europe when China and other manufacturers are already building plants in Europe to serve those markets. Asia obviously already has a number of plants. So it it's unclear to me where the destination destination is they think and what's the path to get there. the most likely path, the most likely way to save our auto sector is to get to the table with the Americans to make a reasonable deal where both countries think that's possible given what you just described as President Trump's behavior.

[00:10:50]>> Well, I think countries have interests.

[00:10:53]Uh we should find out where our interests align. As I said, we purchase about 2 million vehicles a year, which means we import a significant number of vehicles. The number one selling truck in this country is the Ford F-150. that all of those get imported into this country. So I think there should be a recognition and I think there is by the American administration that our market is a large market for vehicles. We should respect the fact that we purchase a lot. Therefore, we should be able to sell some of our vehicles into the US market. That seems common sense.

[00:11:23]>> Okay, I got to leave it there. I'm out of time. I appreciate your time as always, Mr. Chambers. Thank you.

[00:11:26]>> Thank you.

[00:11:26]>> Here we go.