By Allison Lampert
Aug 29 (Reuters) – General Motors plans to assemble a heavy-duty pickup at an Ontario plant as part of a tentative deal with a key union that would pump C$1.1 billion ($791.31 million) into Canada’s auto sector as it reels from U.S. tariffs, a union bargaining report said on Saturday.
The investment comes as Canada’s auto sector grapples with 25% U.S. tariffs on vehicles, with President Donald Trump pledging to double them to 50% on January 1, 2027. The fate of Canadian auto plants has emerged as a central issue in stalled U.S.-Canada trade negotiations.
GM plans to spend C$144 million to add the next-generation heavy-duty GMC Sierra truck to a plant in Oshawa, and pledged not to immediately sell or close a second assembly plant in Ingersoll, Ontario, according to the bargaining report from the union Unifor.
The deal is contingent on approval from workers who are voting on Saturday and Sunday. Both Unifor and GM’s Canadian division declined comment during the vote.
The C$1.1 billion investment includes a C$691 million commitment to support production of new V8 engines in Ontario that was previously announced in April, the report said.
The tentative agreement was reached last Saturday between GM and Unifor on behalf of 4,600 union members in Canada’s most populous province, Ontario.
U.S. President Donald Trump, who has clashed with Ontario Premier Doug Ford in recent days, has also said he will increase tariffs on all Canadian cars and trucks, automotive parts and steel to 50% starting January 1, 2027.
Autos are a key part of talks between the United States and its northern neighbor to reduce U.S. tariffs on Canadian-produced vehicles. Negotiations ended last week over unresolved issues, such as whether to cut duties on medium- and heavy-duty vehicles that are critical for Canadian factories.
Canada has said it cannot accept a trade deal with the U.S. unless the agreement ensures the survival of a robust Canadian auto assembly and parts industry.
United States Commerce Secretary Howard Lutnick has said Canadian negotiators only raised demands to include medium-and heavy-duty trucks on Friday at 4 p.m. just ahead of a deadline for securing a deal.
The tentative deal with Unifor would invest C$215 million to assemble a new generation transmission at a separate factory in St. Catherines, Ontario, starting in late 2029.
GM also committed to not close or sell its CAMI assembly plant, formally known as Canadian Automotive Manufacturing Inc., in Ingersoll while it studies alternative production for the factory. The plant would have priority to do defense work for the Canadian Armed Forces, in the event the automaker secures a contract for such output, the bargaining report said.
($1 = 1.3901 Canadian dollars)
(Reporting By Allison Lampert in MontrealEditing by Rod Nickel and Sanjeev Miglani)
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