Commission of Inquiry into the Canadian Automotive Industry : The Commission of Inquiry Into the Canadian Automotive Industry was established under Order in Council P.C. 1996, 20 June 1978, under Part I of the Inquiries Act (R.S.C. 1970, c.I-13) and on the recommendation of the Minister of Industry, Trade and Commerce. The Commission was mandated to inquire into and report on the means to ensure the development in Canada of a balanced and internationally competitive automotive industry taking into account: (a) the situation in, and structure of, the Canadian automotive industry at the present time, including the motor vehicle manufacturers, the independent parts producers and foreign vehicle manufacturers participating in the Canadian market; (b) the factors affecting developments in the industry and its future prospects including the extent of foreign ownership, the managerial aspects, the research and development activity in Canada, the financial resources requirements and availability, and factors affecting the investment and employment pattern in the automotive industry in Canada; (c) the regional aspects of the Canadian automotive industry development; (d) relationships between the industry in Canada and the industry in the United States, including both those arrangements falling under the Canada/U.S. Automotive Products Agreement and those not covered by the agreement; (e) relationships between the industry in Canada and offshore producers; and (f) the principles of international business conduct issued by the government in July 1975. The commissioner was S. Simon Reisman. The secretary was Gena Freeman.
In the mid-1970s, the North American automotive industry began to make smaller, lighter-weight, safer, and more fuel efficient motor vehicles. This was due, in part, to energy, environmental and safety concerns of the governments of Canada and the United States. But, it also reflected a need for the automotive industry to compete successfully with Asian and European automotive manufacturers which were offering compact cars for sale in North America. The so-called "Big Three" - Ford, Chrysler and General Motors - realized that they had to make substantial investments to modernize existing facilities and for new plant construction. In June 1978, Canada's Minister of Industry, Trade and Commerce, Jack Horner, revealed that the automotive industry in North America would spend "in the order of 60 billion, over the next five to 10 years." He anticipated that a sizeable amount of it would be spent in Canada. The situation, according to Senate Committee on Foreign Affairs was as follows:
"By early 1978 the Canadian government appeared ready to embark on domestic measures aimed at stimulating the Canadian parts industry and by mid-year there were indications that vehicle manufacturers were planning new investments in Canada but were bargaining for the most lucrative location inducements."
Horner held discussions with the three major automobile manufacturers about new automotive production especially the location of new parts manufacturing facilities in Canada. But the results of these discussions were inconclusive. Subsequently, on 16 June 1978, Horner announced that Simon Reisman would examine all aspects of the industry with a view to "the development of an internationally competitive Canadian automotive industry."
In his capacity as Chairman of the inquiry into the automotive industry, Reisman had to deal with a number of contentious issues including the huge trade deficit in auto parts with the United States. Reisman enumerated the main issues as follows:
"there have been mounting complaints from many quarters that Canada was not obtaining its "fair share" of the automotive output generally, parts production, investment, employment or research and development in relation to the market it provided for North American vehicles." (See: News Release, Department of Industry, Trade and Commerce, Ottawa, 16 June 1978, in RG 33/112, vol. 1, file 10P/295-5; House of Commons, Debates, 16 June 1978, p. 6478; The Canadian Automotive Industry: Performance and Proposals for Progress, Inquiry into the Automotive Industry, Ottawa, Supply and Services Canada, 1978, pp. 44-47 and pp. 237-243; and Canada, Senate, Canada-United States Relations, Canada's Trade Relations with the United States, The Standing Senate Committee on Foreign Affairs, Queen's Printer, Ottawa, 1978, Vol. II, pp. 104).
No public hearings were held. But, consultations and meetings took place with firms, organizations and governments with an interest in the automotive industry. In addition, briefs were received from, and meetings held with, organizations and individuals who expressed an interest in participating. RG33-117 General Inventory
