CBC Digital Archives

Canada's car industry before the Auto Pact

In 1965, a landmark agreement with the United States transformed Canada's tiny car-making industry into a world leader. The Auto Pact created thousands of Canadian jobs and was the backbone for a generation of economic growth. But the Auto Pact also tied Canada's fortunes more closely than ever to its southern neighbour.

In 1904, Canada's carmaking industry is born when Henry Ford opens a plant in Windsor, Ont. Since then, the country's fortunes are linked to its auto industry. When Canada fails to develop a home-grown car industry, the country becomes reliant on branch plants of the huge American companies. The Big Three American companies - Ford, General Motors and Chrysler - have a few assembly plants in Canada but before 1965 most of the manufacturing is done in the United States.

By the early 1960s, Canada has a tiny auto industry and a sagging economy. The country has a massive auto trade deficit with the United States, which means it always imports more cars than it exports. Now Canada wants a bigger piece of the pie in the huge carmaking business. In turn, United States wants its neighbour to reduce its 17 per cent automobile import tax so it can sell more cars in Canada.
. Henry Ford began shipping American car parts across the Detroit River in 1904 and assembling automobiles at the Walkerville Wagon Co. in Windsor, Ont. By opening the Canadian plant, Ford avoided the 35 per cent tariff on automobiles.
. There were a few Canadian-owned auto businesses in the early 1900s. In 1902, Sam McLaughlin started the McLaughlin Motor Car Co. in Oshawa, Ont. McLaughlin sold the business to General Motors in 1918.

. During the 1940s and 1950s, foreign investment poured into Canada. By 1957, Americans controlled 70 per cent of the capital of the petroleum and natural gas industry and 90 per cent of the auto industry.
Medium: Radio
Program: Sunday Morning
Broadcast Date: Sept. 3, 1978
Guest(s): James Laxer
Reporter: Beverley Reed
Duration: 6:42

Last updated: April 10, 2012

Page consulted on December 6, 2013

All Clips from this Topic

Related Content

The Auto Pact: En Route to Free Trade

In 1965, a landmark agreement with the United States transformed Canada's tiny car-making indu...

Auto Pact: Auto parts prize

The separation of the parts sector and the assembly sector has resulted in trouble in the Cana...

Auto Pact: Bad deal for Canada

James Laxer discusses why he thinks the Auto Pact is bad for Canada and the U.S.