CARS COULD COST MORE
Changes were made to what is called the “rules of origin” for autos. Basically, this means that there is a new requirement where each car made has to have a certain amount of high wage labour put into it, as well as certain amount of North American-made materials.
The revised rules require a higher level of North American content in each vehicle, incentivizing more production and sourcing within Canada, the United States, and Mexico. Specifically the threshold has been increased from 62.5 per cent to 75 per cent.
As well, automobiles now have a 70 per cent North American steel and aluminum requirement and 40 per cent of passenger vehicles must be made of materials, parts and labour produced or carried out by workers in a plant where the average hourly wage is at least $16 U.S.
This could spark increased automotive production across the three countries, and offer new material production opportunities for Canadian auto part manufacturers. However, some auto industry experts have warned the requirements could result in higher prices for these vehicles if the anticipated higher production costs are passed along to consumers.