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Lecture

SOC 202 Lecture Notes - Industrial Estates Limited, Central Canada, Canadian Content


Department
Sociology
Course Code
SOC 202
Professor
Louis Pike

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Industrial Estates Limited- develop Nova Scotia’s industry
How did Volvo fare at the hands of the federal government in comparison with the rest of the automotive
industry, which was overwhelmingly located in central Canada principally Ontario? On balance, given
that the venture lasted for nearly four decades, could the Volvo plant be considered a successful venture?
Why did Ontario plants thrive under the Canadian state’s central automotive policy – the Auto Pact but
the Volvo plant did not? How did the Halifax plant fit into Volvo’s corporate strategy? In the final
analysis, were the policies implemented by the two governments to persuade Volvo to locate and remain
in Nova Scotia a success?
Article explains why federal/provincial policy makers encouraged establishment of Volvo with incentives
and tariff concessions.
1958-65: first “transplant” in Canada or US
widespread penetration by American multinational auto companies, little or weak domestic manufacture
and parts production and balance of payments difficulties owing to its dependence on foreign automotive
imports.
Voluntary Planning Act of 1963-which was intended to improve business-government communication
IEL’s “philosophy and policy” as Sobey stated in a 1968 Financial Post interview, was based on four
points: to maintain the interest and active participation of prominent Nova Scotia businessmen on its
board of directors, to maintain a small but effective development and office staff, to make an aggressive
search for new manufacturing enterprises on an international scale and to keep an eye out for Nova Scotia
firms that might be able to profit from IEL.
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Nowlan, Nova Scotian and a “red tory” he was motivated to help areas in his province
Volvo in Canada would not be an immediate success with the high tariff rates, in spite of their inclusion
of headlights, bumpers, tires that were Canadian made.
-Canadian exports are the emphasis, but with duty free imports as a result of Auto Pact, US dominated.
-If the market for autos in Canada performed poorly, employment and production declined.
If the market performed well, massive U.S. parts and vehicle imports would send the
Canadian trade balance spiralling downward.
-By 1962, auto imports accounted for 90 per cent of Canada’s nearly $500 million trade deficit. Gov’t
created duty-remission scheme that enabled companies to increase imports if they increased exports
In return for assurances that Volvo train 500 Canadians as mechanics and hire at least 400 workers at their
new plant, the company received remission of duties on bodies, engines and parts through a process
similar to the transmission/engine program.
Initially, Volvo was allowed to begin production with virtually no Canadian content while importing their
parts duty-free.
In Sept/Oct 1962, Samuel met with IEL president and others to discuss two things: costs of transportation
must be cut to transport cars from NS to Central Canada (Ontario). Second, Volvo must be given a
reasonable loan to start facilitation
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