Canada’s Auto Industry and the New Free Trade Agreements

Sorting Through the Impacts
May 6, 2014
498.81 KB34 pages

Despite its challenges over the last decade the auto industry is still a crucial contributor to the national GDP, exports, productivity, an important source of well-paying work and Canada’s second largest export, after petroleum. This study looks at the impacts several free trade agreements (FTAs) currently under negotiation—several of which involved other developed countries that are major exporters of motor vehicles to Canada—will have on Canada's auto industry. 

It does this by:

  • Briefly reviewing Canada’s existing international trade and investment relationships in the auto sector.
  • Identifying the key structur­al features of the Canadian sector: of particular note is the fact that there is no inherently “Canadian” base or character to this industry.
  • Looking at how “free trade” affects the business case for global OEMs to produce motor vehicles in Can­ada in the first place.

Looking at these factors will allow readers to have a bet­ter awareness of the structure of our existing automotive trade and invest­ment relationships, and a better appreciation of the need to conduct trade policy strategically (with a focus on boosting investment), which will help Can­adians better judge whether these additional FTAs will help, or hurt, this crucial sector of our economy.