The Ottawa-based economic forecaster estimates the industry will have $1.35 billion in pre-tax profits this year, its best year since 2002.
"The industry will continue to benefit from brisk growth in vehicle sales, both this year and next," said Michael Burt, director, industrial economic trends.
Burt noted that while Canadian sales are set to surpass their pre-recession level this year, sales in the United States are not expected to return to 2007 volumes until 2014.
"This increasing U.S. demand is expected to lead to a prolonged recovery in Canadian auto exports," he said.
Through the first eight months of 2012, Canadian automotive production rose almost 20 per cent compared with the same period last year, according to the Conference Board report.
Sales in Canada surged 7.1 per cent between January and August of this year and are on track to reach 1.72 million vehicles — the most since 2002.
Across Canada, truck sales continued to outnumber passenger car purchases, particularly in the Prairies where brisk activity in the mining and construction industries is driving sales.
Sales to the U.S. have posted double-digit sales growth three years in a row, culminating in a 15 per cent increase in Canadian exports this year.
Yet, U.S. sales remain 1.7 million units below where they stood in 2007, leaving room for further growth assuming that Congress and the White House take measures to avoid the looming "fiscal cliff" — the combination of big U.S. government spending cuts and the end of Bush-era tax breaks set to kick in automatically at the start of 2013.
Going forward, production growth will slow over the next five years from this year's "torrid pace," with Canadian sales gains limited because demand that built up during the recession "has effectively dried out," the report said.
The Conference Board also noted that General Motors will close one of its Oshawa plants in 2014 and growth in sales will also start to level off in the United States.
Also on HuffPost