Innovation Working Group - Summary
Canadian Automotive Partnership Council Meeting

November 13, 2003

Introduction

From the last meeting, the IWG had 5 main objectives that we were pursuing which have been condensed to the 3 areas below. The primary theme centered around the widely held belief that Canada and its provinces supported initial research reasonably well, but did not carry that support through the commercialization process. This commercialization is the essence of innovation, and further, it is extremely dependent on the existence of automotive assembly plants in this country.

The work over the past 5 months has focused on identifying gaps in current government programs, shortfalls in other aspects of the innovation process and most importantly, on what specific factors would assist the automotive industry to enhance and expand its level of innovation.

Financing Automotive Innovation

After considerable review of existing programs, both Federally and Provincially, it is the recommendation of the IWG that new, automotive focused programs be developed. These programs would address projects in Advanced Research, Product Development, Productivity Improvement and the commercialization of Advanced Technology. It is our opinion that the criteria and guidelines of current programs do not adequately address the key issues of timing, alignment with the current R&D and commercialization business models in our industry, and access. There are virtually no specific funding programs that target support of the sector.

A possible short term action would be to allocate specific and appropriate amounts of existing funds for the automotive sector. However, this does not address the significant barriers to accessing these funds nor the mis-match with the automotive business model. Therefore, the effect on innovation in the automotive sector will be limited.

A new program would require significant and rapid cooperation between the governments and the industry.

Additionally, we have developed a specific set of recommendations to improve the existing SR&ED program. The IWG recommends that the CAPC support these changes throughout their review by the CCRA and others. (reference document dated October 17,2003)s

The IWG has completed an initial assessment of the business case to develop an automotive Web Portal. This tool would provide a means of communicating the availability and suitability of programs to (primarily) the Tier 2/3 suppliers. The expectation is that this would improve the overall utilization of support programs, and therefore supports the innovation process. The APMA has agreed to champion this initiative and further develop the funding requirements.

Consumer Support for Early Commercialization

The IWG recommends that the Federal Government establish meaningful consumer incentives for the purchase of new Environmentally Advanced Technology Vehicles (EATV's). These incentives would offset significant portions of the premium costs associated with the early adoption of these technologies. These incentives should be in the form of direct consumer credits, and avoid the use of sales tax rebates.

Ontario should complete the implementation of their previously announced enhancements to their program in this area.

Both the Federal and Provincial Governments should continue to encourage and provide support for the development of the required refueling infrastructures for these vehicles.

Additionally, the Federal Government's support for the CliMRi initiative should be expanded to $4M, for the specific support and coordination of additional lightweight automotive materials projects. This should be reviewed annually to determine if additional funding could garner additional benefits.

Develop and Encourage New Models of Public- Private Partnerships

Through the IWG we have reviewed the global framework for success in various models of public private partnerships. We intend to identify the specific needs of the industry, and then to develop a new model that addresses these needs and adapts the best elements of the global review to a "Made in Canada" model.

Other initiatives (e.g. IAI) will be reviewed by the IWG , as these groups develop their business plans.