Auto Industry and 150 years in Canada

May 4, 2017 STATEMENT

Celebrating 150 Years of Global Contributions Canada’s Auto Industry
A Story of Change, Resilience and Innovation

The first Canadian-built vehicle rolled off the Ford Motor Company assembly line in Walkerville, Ontario, in 1904 where innovative practices were harnessed to assemble 2 cars at a time! The annual production at that facility was 117 vehicles. Fast forward to 2016 when over 2.4 million vehicles were built in Canada!

Shortly after the Walkerville assembly line began production, the McLaughlin Carriage Company in Oshawa merged with Chevrolet in 1918 to become General Motors of Canada. Around the same time in Windsor, the Maxwell Motors of Canada company built a vehicle assembly plant in 1916 which became Chrysler Corporation of Canada in 1925.

For over a century, Canada has had a dynamic, constantly evolving automotive industry that has played a strategic role in the economy and in local communities where production thrives. Today, the industry directly employs over 130,000 Canadians and over 500,000 indirectly. It contributes over $20 billion to GDP and is the top Canadian export in value.

From its very inception, the Canadian auto industry has been an innovative leader, successfully responding to new opportunities transforming manufacturing and meeting changing consumer transportation needs and demands. By the mid-1920’s Canadian auto manufacturing expanded, mass production capabilities were harnessed, thousands of workers were hired, and consumers enjoyed greater affordability of mass produced vehicles.

During the Second World War the auto industry turned itself over to the war effort reinventing itself and innovating once again when Canada was faced with creating its own industrial base to support the allied forces. The auto sector rose to the challenge and produced more than 800,000 military transport vehicles – more than 50% of all transport used by Montgomery’s Eighth Army and more than a third of all transport in the North African and Middle Eastern theaters, originated from Canadian factories.

Following the return to normal peacetime production, the Canadian auto industry enjoyed boom times in response domestic demand, but soon experienced production inefficiencies and high tariffs for vehicles and parts that crossed the Canada-U.S. border. In response, the Automotive Products Trade Agreement, or “Auto Pact”, was signed in January 1965 creating the first real bilateral trade relationship between Canada and the U.S. The Auto Pact resulted in a more rationalized auto industry, leading to more efficient production and integration on North American basis. The Agreement was a huge success literally creating hundreds of thousands of high quality jobs in both Canada and the U.S.

While the Auto Pact has run its course, many of its successful trade principles have been entrenched in the North American Free Trade Agreement. Canada’s original manufacturers, Chrysler, Ford and General Motors were joined by Toyota and Honda in the 1980s. The North American integration of the auto industry is now a model of how countries can work towards mutually successful trade policy beneficial to each countries’ respective economies and their global competitiveness.

Like the early 1900s when innovative leaps were made in mass production, the industry now finds itself again entering a new era of unchartered territory in disruptive technologies and innovation.

As Canada celebrates 150 years, every aspect of the modern automobile is now high-tech, using state-of-the-art materials and processes such as new digital engineering and nanotechnologies to improve the design and production of vehicles. Canada’s universities’ top talent and research capabilities, along with our skilled Canadian workers are all playing a role.

The Canadian auto industry is a proud part of Canada’s heritage. How it and transportation more generally will look 150 years from now is up to our imagination!

Mark A. Nantais
Canadian Vehicle Manufacturers’ Association