Layer upon layer of automotive technology experience and innovation are embedded in the Greater Toronto Area’s York Region, much like the advanced components embedded in today’s vehicles. Unlike some of the complex systems packed under the hood, however, in York Region you can actually get to them.
Pat D’Eramo knows. I caught up with the president and CEO of Canadian global parts, fluid systems, module and component maker Martinrea International as he drove to the company’s headquarters in York Region’s City of Vaughan.
“The advantage to the location is access to technology, but most importantly, access to resources,” he says, noting that access to a customer such as GM in Oshawa is essential too. “There is a lot of access to first- and second-generation technical people who have gone into the trades, which is harder to come by in the U.S.
Engineering is very strong here. Those types of things definitely make an impact … in fact, one of our top five plants is in the Vaughan area.”
D’Eramo used to work in Oshawa himself. “Seventy percent of the tool and die and mechanical guys I knew there had come from Scotland, Ireland and other places with that talent or skill and then honed it here,” he says, with younger people often following in the footsteps of their families. The undertow of the offshoring wave took skills away that no amount of wishing will make reappear just because companies now want to reshore. “But there certainly seems to be more access to some of those skills proportionally here,” he says. “People who graduated from Canadian schools in engineering tend to go out and get their engineering qualifications or certifications, and a lot of places don’t do that. There is a lot of access to a lot of talent here.”
Today’s iteration of those waves of talent from the British Isles is waves of talent from everywhere else, welcomed with open arms by Canada’s open immigration policy to places like York Region, where the census revealed that close to half of the region’s residents were born outside of Canada.
Stacked with cities full of talent, York Region is the only area outside of Toronto with direct subway connection to Downtown Toronto, and expects its population to grow from 1.2 million to to 2.02 million by 2051.
“That makes it better in my view,” D’Eramo says. “I’m an American and believe you have to control the border, but I also believe you have to have a good immigration policy. We’ve gone as far as to say if we have to get our skills from Canada and bring them from other countries, so be it. Because you can get them into Canada, where in the U.S. it’s very difficult at times. Some of the people we have here — not necessarily older people, but younger and very skilled — have just come from another country in the past few years and have done very well with us. It’s a very important point that helps Canada a lot as far as resources and skills.”
Higher education helps too. “We have had tremendous success with co-ops and intern students,” D’Eramo says. “Some of our best innovation we’ve developed inside our plant processes have been driven, built and proven out by students we’ve hired,” many of them from Queen’s University, York University, the University of Toronto and the University of Waterloo.
Among Martinrea’s projects to keep the innovation flowing is a supply chain partnership project with ThinkData Works and Palantir through Next Generation Manufacturing Canada (NGen), the industry-led organization behind Canada’s Advanced Manufacturing Supercluster. The idea is to marry an increasingly digitized manufacturing environment with reams of global data on everything from shipping to natural resources and weather events. Martinrea also has established Martinrea Innovation Development (MiND), dedicated to incubating, developing and funding innovative technologies that can be directly applied to Martinrea’s operations. The company already has seen a five-fold return on its $50 million in MiND investments.
GM now has a similar organization within the company working on technologies that aren’t necessarily in trucks and cars. GM also has the GM Technical Center that opened in York Region’s City of Markham in 2019 with 700 engineers focused on hardware and software innovation for EVs. Local talent and the ability to obtain talent through Canada’s Global Skills immigration program that fast-tracks immigration for skilled individuals coming to work for Canadian tech companies was a key differentiator.
“We selected this site in Canada because of its clear capacity for innovation, proven talent, great universities, start-ups and innovative partners,” said Ken Kelzer, GM’s vice president of Global Vehicle Components and Subsystems, when it opened. The facility is at the center of the Ontario government’s plan to invest CA$56.4 million in the Ontario Vehicle Innovation Network (OVIN).
Veoneer Finds Value
Nothing quite speaks to the mobility transition like an autotech company that was due to be acquired by a global automotive giant until a global wireless communications giant came along with a better offer.
That’s what just happened to Sweden-based Veoneer, which operates a major manufacturing plant in Markham (with a second building on the way) and employs around 700 of its 7,500 global employees in Ontario making sensors and systems for the North American market. The company was slated to be acquired by another company based in York Region — automotive supplier conglomerate Magna International, headquartered in the Town of Aurora — for around $3.8 billion before Qualcomm and investment partner SSW Partners brought $4.5 billion to the table in October 2021.
“Manufacturing is our bread and butter in this building,” says Brett Johnson, general manager of the company’s Markham site, but innovation is inherent, “to the point of even designing lines here and building exact replicas around the world for our sister plants in Europe or Asia.”
Talent plays a big part in the site, with many individuals coming from the “excellent engineering program at the University of Toronto,” Johnson says, as well as McMaster University in Hamilton. “We’ve recently started hiring out of York University. They launched an engineering program a few years ago.” Among other assets, the Centre for Automotive Research (CAR) at YorkU provides an integrated hub to small and medium-sized firms. A new Markham campus from York University is on the horizon, with its first students scheduled to arrive in fall 2023 and a focus on digital technologies and software development. “We also go after Humber College and Centennial College, which are more focused on the hands-on skilled trades who keep the lines humming,” Johnson says. “They have excellent electromechanical programs we pull on. There is a ton of automation in this facility, and it takes a lot of hands to make sure it stays a finely tuned machine.”
Tomorrow’s Robotics Today
Bluewrist, based in Markham, offers industrial automation solutions in such areas as robotics and machine vision. Essentially, it creates a single, hardware-agnostic operating system for a smart factory so vendors and manufacturers can talk to one another. Around 50 of the company’s 200 employees work in York Region.
Founder and CEO Najah Ayadi immigrated to Canada from Michigan 15 years ago, and says York Region was “an obvious choice” because of the number of high-profile tech companies. “The region provides a deep bench of talent,” says Ayadi, including engineers with major supplier experience and graduates from a mix of universities. Ayadi says, “the upcoming York University campus in Markham will be a great source of talent moving forward.”
As for global opportunities, Ayadi calls the region “a great springboard for global business expansion because of the positive business environment, low tax and support we receive from the region” and local municipality.
York Region hosts some high-end vehicle assembly, including the 2023 Ford Bronco Desert Racer (pictured) from Multimatic, which employs 2,300 people, most of them in Canada and nearly all in York Region.
Photo courtesy of Multimatic and Ford
The ventureLAB Hardware Catalyst Initiative (HCI) in York Region is a springboard to the front of the pack. Ayadi says the HCI is promising because it’s generating chatter about hardware development, a much tougher nut to crack than software. Canada’s only lab and incubator for hardware and semiconductor companies, the HCI is supported by York Region’s investment of $1.5 million over five years and the Government of Canada’s investment of $9.7 million. It includes not only new York Region funds, but participation from industry leaders such as Siemens, TSMC, AMD, Arm and Synopsys who have collectively committed over $50 million in resources, equipment, expertise, and mentorship.
Matt Skynner, COO of ventureLAB, sees the HCI as “a differentiator for York Region” because of the unique business ecosystem in the area and this unique point in time.
“The demand for semiconductors has skyrocketed, and that’s created a challenge, particularly for the automotive industry,” he says. The HCI’s brand already has attracted enterprise software and hardware firms, leading to more leads and new clients and catapulting the program Canada-wide and beyond, which has helped fledgling ventures raise funds. The HCI saw 18 new onboarding entities in 2021, bringing the total to 38 as of February.
“York Region is home to one of the largest and most comprehensive auto tech ecosystems in North America.”
— Brendan Sweeney, Managing Director, Trillium Network for Advanced Manufacturing
“Our goal is to create global companies,” Skynner says, noting recent company applications from India and Spain. He sees great opportunities in such auto-related niches as sensors, actuators and battery technologies. He also sees value in the fact that the HCI is just one of many innovation hubs across Ontario and Canada: “We work with Communitech in Waterloo and other hubs. Hubs need to have those different areas of expertise, because that is where you get the most leverage.”
Tesla acquired Richmond Hill-based Hibar in 2019, which was key to their recent investment in the region for the first branded manufacturing facility in Canada in neighboring Markham. Leveraging York Region for talent is something Tesla is pursuing to establish this new location for innovation.
Brendan Sweeney, managing director of the Trillium Network For Advanced Manufacturing affiliated with Western University, recently led an auto-tech study for York Region, and sees plenty of leverage to go around, starting with the Greater Toronto Area, which hosts “a cluster of manufacturing activity that probably rivals any metropolitan region in North America,” from automotive to aerospace to biopharma. Where the region finds its niche, he says, is artificial intelligence, boosted by “some pretty phenomenal” EV and AI research coming out of the University of Toronto and by (once again) an open immigration policy that’s attractive to students and AI specialists who want to come work in the region’s ecosystem.
“It’s amazing how this immigration system has identified talent, got them familiar with the Canadian education system and industry, and potentially creates a pathway to Canadian citizenship,” he says. “This appears to be a very promising way to continue to advance what is already a very savvy workforce.”
Sweeney’s team concluded that York Region has “a bit of everything” and rivals any region in North America when it comes to auto-tech.
“You also have this labor shed of millions of people, all the talent you want,” Sweeney says. “Is there competition for it? Yes. But good companies find it. When you’re doing something on the cutting edge, people tend to gravitate toward you.
They also gravitate toward a place where they can access the big city life but also find good schools and a bigger home. “York Region and its communities offer that,” he says, from the southern boundary adjacent to Toronto to a northern boundary in Georgina that’s practically cottage country, where “you can catch all the fish you want.”
Stack up the testimonies of business leaders in the automotive tech space, and York Region figures to be hooking its share of big fish for some time.
This Investment Profile has been prepared under the auspices of York Region’s Economic Strategy division. For more information, visit yorklink.ca/autotech.