Trade wars worsening a decades-long decline in automotive production in Canada – report

The ongoing trade war has taken a big bite out of Canadian automobile production but a report from Richmond Hill-based analyst DesRosiers Automotive Consultants says light vehicle production in the country has been in a “long-term” structural decline since the turn of the century.

The auto industry assembled 2.9 million units in Canada in 200 and the report declares the downward trend has been “pervasive” since then, with two additional factors exacerbating the problem in 2025:  the hostile trade stance adopted by the U.S. administration and the market retreat from electric vehicles, “further complicating an already difficult situation,” said DesRosiers Managing Partner Andrew King.

“The auto assembly sector in Canada continues to face ongoing challenges” King said. “Nevertheless, the potential for auto manufacturing in Canada remains strong and it is essential that all levels of government continue their efforts to support the industry. More importantly, however, steps must be taken to address Canada’s broader overall long-term decline in productivity, with urgent structural reform required if the country’s industrial base as a whole is to have any hope of remaining competitive.”

For 2025, total Canadian light vehicle production saw a small decrease from its already low level, dropping to 1.2 million units for the year compared to 1.3 million in 2024. Toyota continued to lead the way, with Honda also performing strongly, as both companies continue their long-term commitment to Canada.

Increased volume was seen at Stellantis in 2025 where, and while the future of the Brampton plant remains uncertain, the outlook is more positive at Windsor with the third shift officially launched on February 17. While Ford saw limited production for the year, the re-tooling at the Oakville plant remains ongoing, setting the stage for stronger vehicle production in the short to medium term.

The cutting on the third shift at Oshawa Assembly – resulting in some 700 job losses – also added to the uncertainties in the Canadian auto sector.