Autonomous State: The Struggle for a Canadian Car Industry from OPEC to Free Trade by Dimitry Anastakis (review)

Dimitry Anastakis’ new book, Autonomous State: The Struggle for a Canadian Car Industry from opec to Free Trade, examines the Canadian state’s battle for a “fair share” of North American automotive investment between 1973 and 1989. Anastakis argues that despite the absence of truly domestic original equipment manufacturers, Canada was able to “carve out and grow a ‘fair share’ of the North American car industry for Canada.” (5) Autonomous State argues that the Canadian state’s creative and aggressive policies during this period succeeded in building a “vibrant” and “multinational” Canadian auto sector that, despite significant challenges, persists today. (7)

According to Anastakis, the ability of Canadian policymakers to challenge both the Big 3 and Washington and successfully achieve a “fair share” hinged upon two main factors: First, he argues that the while the distance between Windsor and Detroit is small, the border between Canada and the US remains politically significant. The Big 3, though a long familiar presence in Canada, are still seen by Canadian policymakers, workers, and consumers as foreign firms. In the decades following World War II this foreignness gave the Canadians leverage to make and achieve demands by threatening to limit access to Canada’s small, but significant, domestic market. The second key factor for Canada’s success was the Canadian state’s continental vision toward growing the industry. Eschewing traditional import substitution, policymakers instead pursued a third way in growing Canada’s auto industry by “employ[ing] an ingenious form of managed trade through the auto pact that included mildly protectionist production safeguards but dispensed with tariff.” (10)

The 1965 Auto Pact, which Anastakis covered in detail in his first book Auto Pact: Creating a Borderless North American Auto Industry, 1960–1971 (Toronto: University of Toronto Press, 2005), created a “new continental regime” of automotive production in North America that led to an explosion of new investment in Canada. Despite impressive growth, the Canadian state was faced with fresh challenges resulting from increased regulation, technological change, and geopolitical shifts. Continentalism didn’t guarantee that the Big 3 would meaningfully incorporate Canada into their restructuring strategies that, according to Autonomous State, were triggered by the 1973 Yom Kippur War and ensuing oil embargo. For Anastakis the period between 1973 and 1989 was characterized by a “titanic battle” over North American automotive investment that took place on “three fronts.” (7)

The first front was the ongoing competition between provinces of Canada (like Ontario and Quebec), and between Canada and the US government and its individual states, for investment. As firms reorganized and streamlined their production amid increased competition and the fading of the post-war investment boom the need to line up new production became paramount for Canadian policy makers. Ontario, already a hub of auto investment, was seen by Quebec to be unfairly favoured by Ottawa, and US states feared losing out to lower wages in Canada as the industry restructured. Anastakis uses the battle over Ottawa and Queens Park’s decision to subsidize the Windsor Ford engine plant to demonstrate this tension.

The 1979–81 bailout and restructuring of Chrysler was another source of tension between Canada and the US. For Anastakis the Chrysler episode shows the ingenuity and steadfastness of Canadian policymakers in their approach to the auto industry. Instead of accepting job losses, Canadian policymakers linked loan guarantees for Chrysler to promises of sustained employment and increased investment in Canada. Though Canadian policymakers couldn’t have foreseen the incredibly profitable boom in minivans and light trucks, their willingness to challenge the US on the nature of the bailout and their understanding of Canada’s centrality to Chrysler’s production footprint enabled them to leverage major gains in the firm’s crisis. The Chrysler episode was also significant for Anastakis in its importance for Canadian autoworkers. The decision by the Canadian workers to diverge from the concessionary path of the United Auto Workers set them...