Feds partner with Ontario to invest $500M at Linamar plant in Guelph

A Linamar Facility, Guelph Ont., May 8, 2014. THE CANADIAN PRESS / Stephen C. Host

TORONTO – The provincial and federal governments are giving auto parts manufacturer Linamar more than $100 million to create 1,200 jobs – but the terms of the deal are secret.

The cash will go to Linamar Corporation’s plant in Guelph, Ont., which already has an unemployment rate well below both the provincial and national averages.

It’s supposed to create 1,200 new jobs over the next decade, and secure more than 1,500 existing positions at the plant.

The subsidy works out to about $83,333 per new job created.

An Industry Canada spokesperson said the jobs will be full time, but that the average salary and terms of the deal are a trade secret.

A spokesperson for Ontario’s Finance Minister said there are “clawback provisions” in the deal to ensure Linamar holds up its end of the bargain, but that the provisions themselves are secret because publishing them “may reduce our negotiating position when we discuss future investments with businesses across Ontario.”

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“The investment will enable the company to develop and produce components for the next generation of fuel-efficient cars and capture a growing share of the North American automotive market,” the Ontario government said in a media release.

Linamar CEO Linda Hasenfratz said at the morning ceremony that it’s “wonderful” governments in Canada are “stepping up and being competitive.”

Federal Transport Minister Lisa Raitt made the announcement alongside Ontario Premier Kathleen Wynne following a tour of the plant located at 700 Woodlawn Road West.

“Canada really is a great place to build cars, and our government is serious about supporting this industry and the well-paid, highly-skilled jobs that it represents,” Raitt said.

Linamar said the expansion will focus on creating lighter, more efficient automobile transmissions and power train parts.

Ontario’s $50 million investment is the first from its 10-year, $2.5 billion Jobs and Prosperity fund.

“This is an example of the kind of investment, the kind of partnership that we can enter into because of that fund,” Wynne said. “The provincial and the federal governments both have a role to play in partnering and in making sure that growth can continue.”

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Guelph’s unemployment rate as of December 2014 is 5.1 per cent, compared to 7 per cent for Ontario and 6.6 per cent in Canada for the same period.

Hasenfratz suggested Ontario and Canada’s low tax burden was a big factor in keeping the expansion in the province.

“Our tax rate is a huge advantage, the lowest in the G7,” she said. “We have an increased focus on free trade, which I think is fantastic to open up new markets to Canadian companies.”

READ MORE: Ontario gave 109 companies $765M over 8 years. So where are the jobs?

Linamar has more than 18,000 employees across the world with factories in Europe, China, United States and Mexico.

– With files from The Canadian Press

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