Front Burner (CBC)

Episode: Can Canada’s auto industry survive Trump?

Date: October 27, 2025
Host: Jamie Poisson
Guest: Dimitri Anastakis, Professor of History and Business at University of Toronto

Overview

This episode tackles the escalating crisis facing Canada’s auto industry in light of aggressive tariffs and shifting trade policies from the Trump administration. Host Jamie Poisson interviews historian Dimitri Anastakis to explore the industry’s history, the economic implications of recent U.S. moves, what’s at stake for Canadian workers and communities, and the potential paths forward for policymakers in an increasingly unpredictable North American trade environment.

Key Discussion Points and Insights

The Current State of Crisis

• Canada’s Auto Industry Under Siege

  • Trump has abruptly ended trade talks and threatened a new 10% tariff, compounding existing trade barriers targeting autos, steel, and lumber.
  • Major manufacturers, notably Stellantis and GM, have announced relocations of some production to the U.S., putting thousands of Canadian jobs at risk.
  • Ottawa is retaliating by imposing limits on tariff-free vehicle imports from the U.S. ([03:12]).

  “This is probably the biggest challenge that Canadians have faced in their auto industry… This one, though, is very much an existential crisis that is unlike anything that we faced before.”
  — Dimitri Anastakis ([03:37])

Economic Importance of the Industry

• Industry’s Reach and Economic Impact

  • Second only to energy, the auto sector is the largest value-added industry in Canada, with significant multiplier effects—5 to 10 additional jobs per assembly job, even higher in EV manufacturing ([04:27]).
  • The sector’s influence radiates past Southern Ontario, impacting supply chains and employment nationwide.

  "Every one of those auto assembly jobs actually leads to five or six or seven additional jobs along the supply chain. And in the EV sector, it's even more—up to 10 employees for every assembly job..."
  — Dimitri Anastakis ([04:27])

Unpredictability in U.S. Policy and Market Response

• Short-Term Gains vs. Long-Term Uncertainty

  • U.S. automakers’ stocks may be up in the short term, benefiting from slowed EV rollout and protected internal combustion engine production.
  • However, industry leaders and analysts warn of chaos and higher costs due to supply chain disruptions and erratic policymaking.

  “The longer term implications of this are pretty difficult … trying to actually come to terms with an administration that is so arbitrary and irrational that they don’t know day to day what’s going to happen.”
  — Dimitri Anastakis ([06:51])

Historical Background: Integration and the Auto Pact

• Branch Plant Era and the Move Toward Integration

  • Until the 1960s, cars made in Canada were mostly for Canadians, assembled by U.S. "big three" branch plants due to high cross-border tariffs.
  • The demand for automatic transmissions in the ‘50s and ‘60s, unavailable in Canada, almost precipitated a trade war ([08:46]).
  • This crisis led to the 1965 Auto Pact, a managed trade regime ensuring that manufacturers built at least as much in Canada as they sold, and allowing free movement of cars and parts within the "big three" ecosystem ([09:24]).

  “The solution they come up with was the auto pact. And the auto pact is a managed contingent trade regime... It allowed integration right into their North American operations. And suddenly Ford of Canada is now producing for all of North America.”
  — Dimitri Anastakis ([11:10])

• End of the Pact, Arrival of New Players

  • Threats to the pact by past presidents (e.g., Nixon) were averted by industry pressure—but today, with less Canadian production and new foreign manufacturers (Japanese, German), U.S. firms fight less for integrated trade ([12:10]).

What Comes Next? Possible Paths Forward

• Reinventing the Relationship

  • Attempts underway to preserve some integration, possibly reviving “auto pact”-style arrangements but tilted to favor U.S. interests.
  • The cost to manufacturers of exiting Canada is very high; new deals could mitigate losses but would further U.S. dominance ([15:32], [16:36]).

  “You might see a kind of re-emergence of an auto pact type arrangement that specifically benefits the United States. That could happen.”
  — Dimitri Anastakis ([16:08])

• Negotiation Leverage and Domestic Policy

  • Pierre Poilievre, Conservative leader, criticizes government environmental and carbon tax policies as harming investment, advocating for more favorable internal conditions for automakers ([19:34]).
  • Dimitri responds that, given Trump’s open hostility, Canada’s policy options are limited. Diluting environmental policy may not change U.S. behavior, and the best move may be to buy time, pressure the U.S. through industry and international partners, and seek new allies—including Asian and potentially even Chinese manufacturers ([20:44]).

  “No matter what we do... if you’ve got a kind of determinedly irrational partner who wants to destroy your auto industry no matter what, and we’re in the situation that we are in because of historical circumstances… There is only so much we can do.”
  — Dimitri Anastakis ([22:49])

The Chinese EV Question

• Tariff as a Bargaining Chip

  • Canada established a 100% surtax on Chinese EVs in line with the U.S.
  • If the U.S. relationship collapses entirely, lowering barriers to Chinese cars could support Canadian consumers, environmental goals, and industry, but carries geopolitical and economic risks.

  “If we’ve removed Chinese tariffs on EVs coming in, you know that something fundamental has really happened.”
  — Dimitri Anastakis ([25:20])

Memorable Quotes

• On U.S. Policy Unpredictability:
  “Trying to actually come to terms with an administration that is so arbitrary and irrational that they don’t know day to day what’s going to happen.”
  — Dimitri Anastakis ([06:51])

• Historical Perspective:
  “The solution they come up with was the auto pact. And the auto pact is a managed contingent trade regime... it allowed integration right into their North American operations.”
  — Dimitri Anastakis ([11:10])

• On Canada’s Dilemma:
  “There is only so much we can do... if you’ve got a kind of determinedly irrational partner who wants to destroy your auto industry no matter what.”
  — Dimitri Anastakis ([22:49])

Notable Segments and Timestamps

• [01:10] – Trump’s latest tariff threats and their impact on Canada
• [02:19–04:27] – State of the auto industry and its economic impact
• [05:22–06:51] – Impact of tariffs on both U.S. and Canadian industries
• [07:34–12:04] – Historical origins of integration and the 1965 Auto Pact
• [15:32–16:36] – Potential for new or revised trade agreements
• [19:34–20:44] – Poilievre’s criticism and debate on domestic auto policy
• [23:03–25:24] – Chinese EVs, tariffs, and Canada’s strategic options

Summary

This episode of Front Burner confronts the existential threat to Canada’s auto industry as Trump-era tariffs upend decades of cross-border integration. Dimitri Anastakis traces the sector’s origins and importance, describes the unprecedented challenge now facing workers, policymakers, and communities, and weighs both historical patterns and radical new realities in North American trade. The episode concludes with a sobering recognition: Canada’s options are limited in the face of U.S. unpredictability, and defending the auto sector may soon require bold, perhaps uncomfortable, new alliances and policy choices.