Driverless test cars could be on public roads in Ontario as early as March 2016, industry participants say, giving Canadian business a big boost in the global race for a stake in this future market.

Ontario has a lot of “world class” high tech and automotive companies, Flavio Volpe, president of the Automotive Parts Manufacturers Association of Canada said in an interview.

But “to stay in the game, we’ve got to show our customers the product in action,” Volpe said.

The provincial government announced Tuesday it would begin accepting applications for driverless test car licenses in November with certain restrictions. The vehicles must include a driver who can over-ride the system if necessary.

The first licenses could be issued as early as January.

The move puts Ontario on track with California and Nevada, where Google’s pod-like car and Mercedes’ sleek F015 are turning heads.

The goal is to keep more jobs in Ontario, transportation minister Steven Del Duca said at the official announcement at the University of Waterloo.

With more than 100 companies and institutions in the autonomous vehicle industry, the pilot project will be an incentive for them to stay in Ontario rather than take their services to “competing jurisdictions,” Del Duca said.

“This makes Ontario a lot more attractive to a startup like us, knowing we'll be able to access funding, employees and vendors as the industry here grows,” said Alex Rodrigues, a University of Waterloo student and partner in Varden Labs, which developed a driverless golf cart as a demonstration project this summer.

“It’s a big boost for Canada and for Ontario,” said Barrie Kirk, executive director of the Canadian Automated Vehicles Centre of Excellencein Ottawa. “There’s a lot of potential business here for Ontario companies.”

Most major automakers, including Ford, GM, Toyota, Audi and Tesla, are developing autonomous vehicles while tech companies, like Google, see huge opportunities to expand their reach.

“I think it's important that we start to test them in Canada,” Kirk said. “It’s great to be able to test them under local conditions, get some experience, and give the tech companies the opportunity to sell into this huge global marketplace.”

Only about 4 to 5 per cent of the value of a new vehicle is in the technology now. But, in future, technology will make up between 40 and 60 per cent of the value, Kirk said.

With a lot of high tech companies in places like Waterloo, Ottawa and Toronto, the provincial economy stands to benefit, Kirk said.

“My guess is that we could see them on the road by March/April of 2016,” Kirk said.

In a report released in January, the Conference Board of Canada said Canada is lagging in preparing for the impact this digital technology will have on our society.

Failure to act could mean Canadian companies lose out on their fair share of the emerging global market for automated vehicles, the board warned.

An exception is Ontario, where Premier Kathleen Wynne has made autonomous vehicles one of the provincial transport minister's priorities, according to Automated Vehicles: The Coming of the Next Disruptive Technology.

Most automakers are already adding parallel parking assist and other automated features to their vehicles. They expect to have fully driverless models in their showrooms within five to 10 years, the report notes.

Meanwhile, Google Inc., envisions a world in which fleets of driverless vehicles replace private cars, providing taxi-like services.

The main benefit of self-driving cars is reduced traffic fatalities, the report said.

Although it’s technically possible for such vehicles to be on the road within five years, getting there will mean clearing several hurdles. This new style of transportation will require new regulations, new insurance products and new consumer attitudes.

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Ontario Economic Development Minister Brad Duguid said talks with insurance companies about the implications of autonomous vehicles are ongoing and that they need to “move fast” or fall behind the times.

“Our roads are going to be very different 10 years from now, 20 years from now, 30 years from now,” he said at the Waterloo announcement. “You can’t deny the disruption—you’re going to get run over by it, or lead it. And we are going to lead it.”

Ontario’s driverless companies

With files from Brennan Doherty

More than 100 companies in Ontario are involved in products and services for self-driving vehicles, the provincial ministry of economic development estimates. Here are fie examples.

Varden Labs is a startup founded by University of Waterloo mechatronics students Alex Rodrigues and Michael Skupien. It is developing technology to turn shuttles into self-driving vehicles for retirement communities and large corporate campuses. They developed a prototype using a golf cart.

Inago Inc. is a Toronto company that is developing a “safe driver notification” system that decides whether to deliver a voicemail from your mom while you’re on the ramp to the 401 in a blinding rainstorm.

TrustPoint Innovation Technologies Ltd. is a Waterloo company that is developing the encryption software for crash avoidance technology to ensure a hacker can't remotely break into you car and steer it into oncoming traffic.

Lixar IT is an Ottawa-based firm and one of 13 Ontario companies that contributed technology to a Lexus RX 350 demonstration car built at Toyota’s plant in Cambridge.

QNX Software Systems is a BlackBerry subsidiary and the world's largest maker of ultra reliable operating systems for use in vehicles. Over 60 million vehicles coming off all the world's automotive production lines include embedded QNX software.

The Canadian Autonomous Vehicle Centre of Excellence is a co-developer with Windmill Developments of a driverless shuttle service for Zibi, a large scale sustainable housing development on the former Domtar site in Ottawa.

Correction – October 14, 2015: This article was edited from a previous version that mistakenly said over 60 per cent of vehicles coming off the world’s automotive production lines include embedded QNX software.