The Automotive Industry in Canada

The North American automotive industry was born in Canada.

The first large-scale production of automobiles in Canada took place in Walkerville, near Windsor, Ontario in 1904. In the first year of operations, Gordon McGregor and Wallace Campbell, along with a handful of workmen produced 117 Model "C" Ford vehicles at the Walkerville Wagon Works factory.

Driven by the demands of World War I, Canada's automotive industry had grown, by 1923, into the second largest in the world, although it was still comprised of relatively inefficient plants producing many models behind a high tariff wall. High consumer prices and production inefficiencies characterized the Canadian auto industry prior to the signing of the 1965 Automotive Products Trade Agreement with the United States.

The 1965 Automotive Products Trade Agreement or “Auto Pact” represents the single most important factor in making the Canadian automotive industry what it is today: a strong, successful industry that has a significant positive impact on the Canadian economy. Key features of the Auto Pact were the 1:1 production to sales ratio and Canadian Value Added requirements.

During the 1970s, three events dramatically changed the world automotive industry, and in particular the North American industry: the oil embargo of 1973/1974, the Iranian oil crisis of 1979, and the emergence of Japan into one of the world's largest producers of motor vehicles.

The automotive industry was almost completely restructured during the recession of the early 1980s and emerged as a globally competitive industry able to take on not only Japan but other newly industrialized countries like South Korea and Brazil.

Key changes included:

	New contracts with the Canadian Auto Workers union to reflect common interest and mutual challenges;
	The emphasis in production on the "Just in Time" inventory control system;
	The use of statistical process control methods as a basic tool to improve both quality and productivity on an ongoing basis.

New models are continuously re-designed and re-engineered in response to consumer demand for increased safety and convenience and the need for emissions reductions, greater fuel efficiency and recyclability. In making these major changes to product lines, investment by manufacturers in production facilities and equipment has increased greatly. In Canada, capital spending and investment commitments by CVMA member companies since 1990 has exceeded $24 billion.