Canadian Auto Industry

Paper Summary:

This paper explains that the Ontario province government has implemented several strategies to encourage private sector investment in the province's automobile industry. These strategies combine loans and grants that are designed to "top up" or encourage the investments of companies in the private sector. The author points out that the ideological underpinning of this strategy is liberal democratic capitalism under which the state is seen as playing a supportive role to industry by absorbing some of the costs associated with industrial growth and development. The paper relates that the cars manufactured in Canada are not intended to compete in the global marketplace but rather almost entirely in the U.S. as intracorporate trade in the form of parts and assembly for different plants of the same company on different sides of the Canada-US border. The author points out that the Canadian competitive advantages are the low value of Canada's currency in comparison to the United States dollar and the various Canada-U.S. trade agreements.

From the Paper:

"Globalization has also been recognized by critics of Canadian industrial policy as a threat to Canadian jobs and the economy as a whole, for it is argued that highly paid Canadian workers cannot compete on a globally leveled playing field against much more lowly paid workers in places such as Mexico. While many specialists in the fields of trade and economics have argued that free trade and globalization are essential to foster competitiveness in Canadian industry, it seems likely that there will be some cost to Canada given the historic low competition ranking of Canadian industry when compared with its global competitors."

Sample of Sources Used:

• APMA. Automotive Parts Manufacturers' Association. Retrieved: February 14, 2007.
• Barlow, Maude. "Global Showdown: The Future of Democracy in the Era of Economic Globalization." Canada and the New World Economic Order. Toronto: Captus Press, 2001, 389-402.
• Barrows, David and Cotsomitis, John. "Canada's Global Competitiveness." Canada and the New World Economic Order. Toronto: Captus Press, 2001, 3-33.
• Barrows, David and Cotsomitis, John. "International Trade and Investments." Canada and the New World Economic Order. Toronto: Captus Press, 2001, 144-177.
• Brean, Donald. "Canada's Economy: Structure and Performance." Canada and the New World Economic Order. Toronto: Captus Press 2001, 33-57.

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