TORONTO, (April 15, 2004) — Making good on a proposal it floated a couple months ago, the Ontario Liberal government has announced it will invest $500 million toward the province’s vital auto industry.

Today’s Trucking reported in February on the plan, which calls for government money to be rolled out over five years in order to provide automakers with advanced technical training, improved infrastructure, and research investments. The government predicts that the $500 million will eventually grow to $5 billion in investments by automakers and related suppliers.

Noting that a new auto plant hasn’t opened in the province for years, Joseph Cordiano, Ontario’s minister of economic development, said he hopes the money will provide automakers incentive to invest in their Ontario facilities, as well as lure new manufacturing facilities. The province is competing with other regions for auto investment, particularly some southern U.S. states which offer large tax incentives, and South America, which has a cheap labour pool.

The auto industry, as well as related businesses like trucking and parts production, drives the province’s economic engine. The sector is Canada’s largest exporter, accounting for roughly a quarter of total exports.

There is still no word whether the plan — which essentially replaces a $625-million fund put forward by the former Conservative government — will affect Ford Motor’s decision to transform its assembly plant in Oakville, Ont. into a more flexible manufacturing facility that can handle any model, or if it will put such efforts into another location.

The company told news agencies that the government money was a welcome first step, but wanted to see more details on the program before commenting further.

Last year, the former Conservative government along with the federal government earmarked $65 million in aid to keep Navistar International’s truck assembly plant open in Chatham, Ont. Navistar had planned to close the plant in July 2003 after failing to achieve concessions with the Canadian Auto Workers union. While a last-ditch deal with CAW found $47.7 in savings, Navistar said it would still need government assistance to match the $63.1 million it would save each year by producing trucks in Escobedo, Mexico.

— with files from Reuters