Canada’s auto sector is making drastic changes as it tries to stay afloat in the midst of trade uncertainty.

More than 80 per cent of Canadian original equipment manufacturers (OEMs) are adjusting their supply chains, while 70 per cent are looking to expand into new international markets and 62 per cent are changing the mix of products they produce to avoid tariffs, according to a survey by KPMG Canada.

For some OEMs, the changes are wholesale, with more than 15 per cent of them expecting their business to be “completely transformed” within the next three years and 51 per cent saying they have shifted their focus to defence production from automotive.

“The survey captures an industry that understands the scale of disruption but continues to make disciplined decisions,” Flavio Volpe, president of the Automotive Parts Manufacturers’ Association,

said in the report.

“Leaders are reinforcing supply chains, adjusting cost structures, adopting technology at a faster rate than most outside observers appreciate and, in many cases, looking to overseas partners to offset the uncertainty around North American trade. That is a pragmatic response to a complex moment.”

Canadian auto parts face a 25 per cent tariff from the United States, as

U.S. President Donald Trump

pushes for more domestic auto manufacturing. That has prompted several manufacturers, including

Stellantis NV

and General Motors Co., to scale back their operations in Canada and eliminate thousands of jobs.

In response, the Canadian government last week announced a new tariff policy that offers credits to companies that manufacture in Canada and a deal with China to allow more electric vehicles (EVs) to enter the country at a lower tariff rate.

Given the uncertainty, it’s no wonder geopolitics is Canadian OEMs’ top concern, but 40 per cent believe they will emerge stronger.

“The auto sector has been dealing with change for decades — from post-recession recovery in the 2010s to COVID-19 and resulting supply chain challenges in (the) 2020s; it’s disruption as usual in this business,” Dave Power, partner and national sector leader of automotive at KPMG Canada, said in the report. “However, today’s challenges are, in many cases, new, and sector leaders will need to use their learned experience to successfully navigate the road ahead.”

The OEMs also believe the challenges present an opportunity, with 44 per cent saying advanced technologies can be an avenue for growth, while the changes are creating a stronger supply chain and opening doors in the EV battery sector.

TFSA vs. RRSP: A wealth-building series from the Financial Post

It’s one of the most important — and sometimes confusing — savings decisions Canadians face, and the right answer depends on far more than a simple rule of thumb. The Financial Post series called

TFSA vs. RRSP

 breaks down the key questions in deciding between the two accounts, including mistakes to avoid and how to get the most bang for your buck.

Read the series here.

 Sign up here to get Posthaste delivered straight to your inbox.


Retail sales in the U.S. stalled in December, indicating that a boost in early holiday shopping was short-lived as Americans remain frustrated by the high cost of living and a slowing job market.

The value of sales was little changed in the month, after a 0.6 per cent gain in November, as eight of the 13 categories reported declines, according to U.S. Commerce data released Tuesday.

Stock market gains are boosting spending among wealthier Americans, but data indicates lower spending among lower-income residents who rely on wage growth for discretionary spending.

Read more.

  • Bank of Canada summary of deliberations released at 1:30 p.m. ET
  • Today’s data: Building permits for December, U.S. Treasury budget for January
  • Earnings: Cisco Systems Inc., McDonald’s Corp., T-Mobile U.S. Inc., TotalEnergies SE, Shopify Inc., Sun Life Financial Inc., Manulife Financial Corp.

  • WestJet, Air Transat, Sunwing join Air Canada in suspending service to Cuba
  • Trump threatens to block new Detroit-Windsor bridge in fresh row
  • ‘Escape hatches are gone’: Power of sale listings surge in Toronto
  • Forget the tax gimmicks. Ottawa should just cut the rate and offer one big credit

There are several strategies to make the most out of your RRSP and TFSA accounts, including starting early to take advantage of compounding interest, checking for employer contributions, reinvesting your tax refund and splitting income with your spouse.

Read more here. 

Interested in energy? The subscriber-only FP West: Energy Insider newsletter brings you exclusive reporting and in-depth analysis on  one of the country’s most important sectors.

Sign up here.

Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@postmedia.com with your contact info and the gist of your problem and we’ll find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course).

McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s

Financial Post column

can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his

mortgage rate page

for Canada’s lowest national mortgage rates, updated daily.

Financial Post on YouTube

Visit the Financial Post’s

YouTube channel

for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.

Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at 

posthaste@postmedia.com

.

  • It’s getting harder to reach those retirement ‘golden years’
  • Back-to-office mandates buoy Canadian restaurant industry

Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here