GM will also hire 1,000 new workers in Ontario to focus on research for connected and driverless cars.
Canada and particularly Ontario has been promoting its car-making sector as it attempts to compete with Mexico.
Ontario's Premier called the investment a "vote of confidence".
"Our government welcomes this investment, which will help Ontario play a leading role in building the auto industry of the future," said Premier Kathleen Wynne.
Canada has been fighting to keep carmakers in the country. Many have been lured to Mexico where production is cheaper and the cars have the same tariff free access to the US market.
As part of this effort last year Ontario became the first Canadian province to allow road testing of driverless cars.
Over the last five years carmakers in Ontario produced nearly 15% of all North American vehicles.
The investment will be in GM's Kapuskasing plant, which focuses on cold weather technology.
In April, GM purchased land to develop an urban mobility campus to test driverless cars in city driving conditions.

Police in New Mexico's capital Santa Fe confirmed the remains as those of Randy Bilyeu from Colorado.
He went missing in January this year hunting for a $2m (Â£1.5m) trove hidden by art dealer and author Forrest Fenn.
Thousands have searched for the hoard left by Mr Fenn, who gave clues about the treasure's location in a 2011 book.
Bilyeu set out for the Rocky Mountains in northern New Mexico with a raft and his pet dog on 5 January.
His wife reported him missing on 14 January, and the raft and dog were found the next day. The remains were discovered along a stretch of the Rio Grande river.
Mr Fenn has urged people not to search for the treasure during winter and joined in search efforts to find Bilyeu.
The writer says hunters should not look in "any place where an 80-year-old man couldn't put it".
A Texan woman got lost searching for the treasure three years ago but was found by rescuers.

Staff at the hospital, run by the Northumberland, Tyne and Wear NHS Foundation Trust (NTW) ordered a pizza on 10 December, but were dismayed when the phrase appeared on the delivery instructions.
The NTW said staff were "greatly distressed".
Neither the hospital or the pizza shop have been identified.
The trust, which runs sites in Northumberland, Newcastle, North Tyneside, Gateshead, South Tyneside and Sunderland, said it had written to the shop and removed the takeaway from its list of approved suppliers until the matter is resolved.
Will Green, head of communications at NTW, said: "Despite great efforts over recent years, mental ill health is still surrounded by prejudice, ignorance and fear.
"With one in four people experiencing some form of mental health issue in their lifetime, it is important that organisations such as ours support efforts to reduce stigma and challenge examples of stigma wherever we find them."
General Motors has announced plans to invest $10m (£6.96m) in a Canadian plant as part of an effort to boost driverless technology and cold weather testing.
[NEXT_CONCEPT]
The remains of a 54-year-old man who disappeared hunting for a hidden stash of gold and jewels in New Mexico have been discovered, local authorities say.
[NEXT_CONCEPT]
A pizza company labelled a hospital a "looney bin", leaving mental health workers "horrified and distressed".