Canada will invest CA$4.7 billion for VIA Rail to acquire and maintain 313 new passenger rail cars, said Prime Minister Mark Carney on Thursday.
The government is implementing a policy to prioritize local purchases to safeguard jobs and strengthen manufacturing, especially amid the ongoing trade tensions with the United States.
This marks the first time in four decades that VIA Rail passenger cars will be built in Canada, according to Prime Minister Carney in a statement.
The project is expected to support nearly 700 jobs and generate more than CA$1.6 billion in economic benefits, while drawing on more than 900 Canadian suppliers and maximizing the use of Canadian steel, according to Carney.
The investment arrives amid a trade war between Canada and the US, following the breakdown of talks in August as Canada claimed last-minute demands were made. Carney has warned that US demands could have severely damaged Canada's manufacturing sector, particularly in the automotive industry.
"Cars once made in the United States, now made here at home," said Carney in Thursday's statement. "This means new contracts for Canadian suppliers, good jobs for Canadian workers, and paycheques that stay in Canadian cities and towns."
The cars will be manufactured and assembled in Thunder Bay, Ontario, and La Pocatiere, Quebec, with design and engineering work in Saint-Bruno-de-Montarville, also in Quebec.