Why did automobiles and automobile parts become major Canadian exports?

Automobiles and automobile parts became major Canadian exports primarily due to the integration of the Canadian and American automotive industries, which was catalyzed by the 1965 Auto Pact. This agreement eliminated tariffs on most automotive parts traded between the two countries, providing a significant boost to the Canadian automobile industry and allowing it to expand dramatically.12

Historically, the Canadian automotive sector consisted largely of branch plants of U.S. firms located in the industrial heartland between Quebec and Windsor, Ontario. This geographic proximity to the U.S. manufacturing center in Detroit, Michigan, facilitated deep economic ties. Following the Auto Pact, manufacturing growth in Canada was increasingly led by exports, primarily to the United States. Subsequent trade agreements, such as NAFTA and the USMCA, further solidified this integration by establishing rules for duty-free access and regional content requirements for vehicles and components.23