Canadian domestic car sales are increasing, however their manufacturing output has been steadily decreasing, and southern states in America as well as Mexico have been advancing towards the level of output that Canada produces.

This decline in the Canadian Auto industry are partially due to labor costs. Due to the high canadian dollar, labour costs in Canada are more expensive. Thus it is easier to produce more in a cheaper country such as Mexico or move (outsource) manufacturing operations to a less expensive area. NDP Leader Tom Mulcair and then-Ontario Premier Dalton McGuinty suggested last year that “a high Canadian dollar, fueled by Canada’s oil exports, was hurting central Canadian manufacturing … they see a threat to their economy”.

This increase in the cost of Canadian labor not only affects Canadian outputs but also the global market.  Thus the increase of Chinese automobile manufacturing has rapidly increased due to cheap cost of labor, thus Canada’s economy, specifically automobile manufacturing, is becoming a smaller part of global trade.

A suggestion on how to improve Canada’s manufacturing industry is to become strategic about “where future growth will be and aim for those markets” as well as position themselves in the global economy so that they are essential.

http://www.huffingtonpost.ca/2013/10/07/auto-manufacturing-canada-collapse_n_4059489.html