Canada's GDP is about $650 billion, with a per capita income of $20,903. The inflation rate is 1.8%. The top individual income tax bracket is 51.64%, with an average tax rate of 17%. The top corporate rate is 46.12%, the capital gains tax is 21.84%, and value added (or goods and services) tax is 7%. The Canadian Government consumes about 20.6% of GDP.

The Heritage Foundation Index for Economic Freedom ranks Canada 14th out of 160 countries; Hong Kong is first and the United States is 6th. Another measurement of economic freedom is Transparency International's (TI) Corruption Perceptions Index. This index lists Canada 6th out of 85 countries and the United States 17th.

The Canadian automotive industry was very apprehensive about NAFTA, thinking the worst: that all production would eventually move south to Mexico. That did not happen. Instead, output in Canada increased to 2.7 million units. The total fleet for 1998 reached 15.9 million and is forecast to reach 16.3 million by 2000. Passenger cars represent 63%, or 10.3 million units, of the fleet.

In 1997 sales increased sharply for the first time in 10 years to 740,000 units. This increase is expected to continue into 2000 with a forecast of 810,000 units. Light trucks now represent 30% of all vehicles registered and on the road in Canada, and are forecast to reach 37% by 2000.

Ninety percent of all Canadian exports of automotive parts reached $1.6 billion and are destined for the United States. Imports reached approximately $3.3 billion in 1998. U.S. manufacturers based in Canada for aftermarket parts production have a market share of about 90% while U.S. supplier imports account for 86%. The U.S. exports market for 1998 reached $2.8 billion.

The Canadian three-step distribution process is still in place; however, at least 60% of the three-step process is still being used but it is changing slowly. For example, (warehouse distributors) + (jobbers and wholesalers) + (installers and retailers). Advance electronics inventory control has eliminated physical handling of products and suppliers can now ship to the end user directly.

Sales of previously driven vehicles between 6 to 10 years old were about 3 million units in 1998. This creates a substantial demand for aftermarket products in Canada.

The Asian automobile manufacturers that are operating in Canada will source more parts from North American suppliers and their subsidiaries due to the North American Value Added Criteria under the NAFTA agreement. The Canadian automotive aftermarket parts industry reached an estimated $4.2 billion and is forecast at a 3-5% rate through 2000.

Passenger and Light Commercial Vehicle Production

Manufacturer 1998 2000 Cami 140,000 136,000 DaimlerChrysler 700,000 700,000 Ford 600,000 580,000 GM 900,000 890,000 Honda 200,000 250,000 Toyota 140,000 170,000 Volvo 7000 7000 Total 2,687,000 2,733,000

New Car Sales, by manufacturer

Manufacturer 1998 2000 BMW 7000 7400 DaimlerChrysler 90,000 100,000 Ford 110,500 120,000 GM 240,000 252,000 Honda 90,000 98,000 Hyundai 19,000 20,000 Mazda 23,000 27,000 Mercedes-Benz 6000 6200 Nissan 20,000 22,000 Subaru 7500 8000 Suzuki 4700 6000 Toyota 83,000 90,000 Volkswagen 32,000 37,000 Volvo 7500 8000 Others 9000 8800 Total 748,700 810,400

Employment in Canada's automotive industry is estimated at about 600,000 while aftermarket employment is approximately 200,000 (gasoline service stations employed 112,000 workers in 1990; 54,000 in 1997).

Country profiles were provided by Raymond Champagne