Feds, Ontario invest $100M to support Linamar auto parts maker

Linamar Corporation logo. (THE CANADIAN PRESS / HO)

OTTAWA -- The federal and Ontario governments unveiled up to $100 million worth of combined grants Monday to help Canadian automotive parts maker Linamar Corp. develop advanced manufacturing technologies.

Beyond technology and jobs, federal Economic Development Minister Navdeep Bains hoped the Linamar (TSX:LNR) announcement could also serve as way for him to highlight just how integrated the automotive sector is between Canada and the United States.

The announcement landed at a time of significant uncertainty surrounding the future of the North American Free Trade Agreement. Bains planned to refer to the investment later Monday to help him make a case for the importance of the trade pact during a visit to the North American International Auto Show in Detroit.

"I think investments in Canada are not only good for Canada, but also good for the U.S. as well," Bains said in a phone interview after the Linamar announcement in Guelph, Ont.

"The first goal is, again, to make sure that we continue to talk about NAFTA and the importance of NAFTA and show as much support we can for NAFTA in terms of the advocacy work we're doing with the administration, with government officials in the U.S., with business leaders.

"So, that's priority one and I'll be conveying my support for NAFTA with all the bilateral meetings I'll have with the car manufacturers."

Bains said he would also promote investment opportunities in Canada and discuss different programs Ottawa has been using to attract investors, including those focused on skills and technology.

The Linamar grants are expected to create 1,500 jobs in Canada and help maintain more than 8,000 other positions.

The federal government will provide a grant of $49 million to the company and Ontario will provide a conditional grant of up to $50 million.

The Ontario government said in a statement that its conditional grant will come from the province's jobs and prosperity fund as part of a project with overall eligible costs of up to $500 million.

The release said the funding will help Linamar build next-generation transmissions and drive trains, high-efficiency engine parts and develop technologies for electric and connected vehicles. It also said the grants will support a Linamar innovation centre focused on technologies such as artificial intelligence, machine learning and collaborative robotics.

The project will be the first to receive cash through a federal program announced in the budget last year to support research and development, the scale-up of high-potential companies and efforts to attract investment to Canada. Ottawa's strategic innovation fund is open to all sectors and will allocate $1.26 billion over five years through a combination of grants and loans.