Manufacturing, Transportation Equipment
Chrysler minivans, Chrysler models, southern Quebec, s Toyota, local plants
Canada’s chief manufacturing industry is transportation equipment, especially automobiles and auto parts. Subsidiaries of the American big three auto companies, General Motors, Ford, and Chrysler, are Canada’s largest manufacturers; in the 1980s Toyota, Honda, and Hyundai also established branch plants. This manufacturing sector generated C$57 billion in exports in 1995 (23 percent of goods exported). Nearly all transportation equipment is produced in southern Ontario and southern Quebec.
The transportation equipment industry has evolved toward a single continental market. This is due primarily to Canada’s smaller market, which makes Canadian branch plants inefficient. In the 1960s the governments of Canada and the United States, together with executives of the automobile industry, negotiated the Canada-United States Automotive Products Agreement, which removed Canadian import tariffs as long as automakers produced as many cars in Canada as they sold in Canada. The result has been a continental integration of auto production, where particular models are built in local plants and distributed throughout North America. For example, Chrysler minivans are assembled in Windsor, Ontario, for the entire North American market, while there is no production in Canada for several other Chrysler models. This integration has led to a more efficient industry but has also meant that events that occur in one part of the North American auto industry affect the entire continent. A protracted strike at a parts plant in Ontario, for example, can cause the closure of assembly plants in Ohio, and vice versa.
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