The increased FDI into Canada since the early 1990s has also had an important effect on the renewal of plants and equipment. FDI in machinery and transport equipment increased by 50.1 percent between 1990 and 1996 alone. This investment is also assumed to have contributed to the higher productivity observed during this period.
Canadian Investment in the United States
Mexican Investment in Canada
Canadian Investment in Mexico
The North American Agreements On Environmental And Labour Co-Operation
Negotiated and implemented in parallel to the NAFTA, the North American Agreements on Environmental and Labour Co-operation were designed to facilitate greater cooperation between the partner countries in those areas and to promote the effective enforcement of each country’s laws and regulations.
Labour
The Commission for Labour Co-operation (CEC) was created in 1994 by the North American Agreement on Labour Co-operation (NAALC) to promote co-operation on Labour matters between NAFTA members and to promote the effective enforcement of domestic Labour law. The Commission consists of a Council of Ministers (comprising the labour ministers from each country) and a Secretariat, located in Dallas, Texas.
The Secretariat provides administrative, technical and operational support to the Council and is charged with the implementation of an annual work program. National Administrative Offices (NAOs), located in the departments responsible for labour in each of the three countries, serve as domestic implementation points for the Agreement.
Regarding the NAALC, the Canadian Intergovernmental Agreement provides a mechanism for provincial participation and has now been signed by Alberta, Quebec and Manitoba. This agreement gives the provinces an important role in developing and managing Canada’s involvement in the NAALC. With the combined participation of these provinces and the federal government, the NAALC now covers more than 40 percent of the Canadian workforce.
As of June 1997, a total of seven public communications have been received under the NAALC, all of which deal with freedom of association. Six of the submissions have been directed at Mexico (one was withdrawn) and one at the United States. Canada has not been the subject of any submissions.
In 1996, the Commission issued a preliminary report profiling North American labour markets. It also released an initial report on labour law in Canada, Mexico and the United States in the area of industrial relations (freedom of association and right to organize, right to bargain collectively and right to strike). At the request of the Council, the Secretariat completed a study on the effects of sudden plant closures on freedom of association and the right to organize. In February 1997, the Secretariat hosted the first North American Seminar on Incomes and Productivity with business, labour and academic participation.
Environment
The Commission for Environmental Co-operation (CEC) was created in 1994 by the North American Agreement on Environmental Co-operation (NAAEC) to enhance regional environmental co-operation, reduce potential trade and environmental conflicts and promote the effective enforcement of environmental law. It also facilitates co-operation and public participation to foster conservation, protection and enhancement of the North American environment. The Agreement, signed by Canada, Mexico and the United States, complements the environmental provisions established in the NAFTA.
The CEC consists of three principal components: the Council, the Joint Public Advisory Committee (JPAC) and the Secretariat. The Council, which is the governing body of the CEC and is composed of cabinet-level representatives from each of the three countries, met in Pittsburgh, Pennsylvania in June 1997. The Joint Public Advisory Committee is composed of 15 members, five from each of the three countries; it advises the Council on any matter within the scope of the Agreement. The Secretariat provides administrative, technical and operational support to the Council and is charged with the implementation of the annual work program.
Regarding the NAAEC, the Canadian Intergovernmental Agreement (IGA) provides a mechanism for provincial participation in the Agreement and has now been signed by Alberta, Quebec and Manitoba. The IGA facilitates the provinces’ participatory role in developing and managing Canada’s involvement in the NAAEC.
The Council is responsible for approving the Commission’s work program and the Secretariat receives endorsement to implement it. Progress has been made in several areas. On Sound Management of Chemicals, trinational-working groups are working toward developing regional action plans for polychlorinated biphenyls (PCBs), mercury chlordane and dichloro-diphenyl-trichlorethane (DDT). Two other substances are likely to be identified for implementation in the course of 1997. On Climate Change, four joint implementation proposals – two related to carbon sequestration and two related to energy have been chosen by the CEC for pre-feasibility studies.
It is also the Secretariat’s role to consider complaints from any non-governmental organization or person asserting a party’s failure to enforce its environmental law. As of June 1997 the Secretariat has received three such complaints. The Secretariat also prepares reports on any environmental matter related to the co-operative functions of the NAAEC.
· Department of Foreign Affairs and International Trade, September 1998
Appendix F
(SIC-3081) – Machine Shop Industry
The 4-digit SIC under review is the Machine Shop Industry, which is associated with the Machine Shop Industry 3-digit SIC, which in turn is one of the major industry categories under the broader 2-digit Fabricated Metal Products Ind. (excl. Machinery and Transportation Equipment). With respect to the activity or division grouping, this latter industry grouping falls under the Manufacturing division.
Statistics Canada defines the Machine Shop Industry (SIC 3081) as: Establishments primarily engaged in manufacturing machine parts and equipment, other than complete machines, for the trade. This industry includes machine shops providing custom and repair services. Establishments primarily engaged in rebuilding or remanufacturing automotive engines are included here.
Establishments primarily engaged in repairing automotive generators, starter motors and alternators are classified in *9941 – Electric Motor Repair* those primarily engaged in rebuilding automotive parts such as fuel pumps, water pumps, brake shoes, clutches, solenoids and voltage regulators are classified in *5529 – Other Motor Vehicle Parts and Accessories, Wholesale* and those primarily engaged in repairing automobiles and trucks are classified in *63 5 – Motor Vehicle Repair Shops* and *5512 – Trucks and Buses, Wholesale*, respectively.
Some, but not a of the products related to this industry include:
Camshaft regrinding
Crankshaft regrinding
Engine rebuilding
Machine shop
Machining, custom work
Manual transmission rebuilding, mfg.
Metal boring and drilling, custom
Metal grinding, lapping and honing, custom
Metal punching, custom
With respect to the next level of industrial aggregation, Statistics Canada rolls up the Machine Shop Industry (SIC 3081) into the Machine Shop Industry (SIC ‘3080). The chart below provides a proportional indication of the actual contribution of the Machine Shop Industry to the larger and more aggregated Machine Shop Industry. In 1996, total shipments in the 3-digit SIC were $2.8 billion, with the Machine Shop Industry accounting for 100%.
Total Shipments, 1996 Machine Shop Industry
Source: Business Integrated Database (Industry Canada and Statistics Canada). The next level of industrial aggregation is described as a 2-digit SIC. In this case the Machine Shop Industry (SIC-E 3080) are included within the
Fabricated Metal Products Ind. (excl. Machinery and Transportation Equipment) (SIC-E 3000). The chart below illustrates the relative contribution and recent growth in terms of shipments of each of the sub-industry groupings included within the Fabricated Metal Products Ind. (excl. Machinery and Transportation Equipment).
Total Shipments 1996 ($billions)
In 1996, the Fabricated Metal Products Ind. (excl. Machinery and Transportation Equipment) produced $23.5 billion and grew at an average compounded annual rate of almost 3.3% over the 1990 to 1996 period. In 1996, the Machine Shop Industry segment represented almost 12% of total Fabricated Metal Products Ind. (excl. Machinery and Transportation Equipment) shipments,
The final level of aggregation encompasses all of the manufacturing sector. The chart to the right illustrates the relative contribution of the Fabricated Metal Products Ind. (excl. Machinery and Transportation Equipment) within the manufacturing sector. Total manufacturing shipments for the economy grew an average annual compounded rate of 5.9% over the 1990 to 1996 period, and produced approximately $489.7 billion in 1996.
TransportationTotal Shipments, 1996 ($billions)
As described earlier, the U.S. Department of Commerce’s Census Bureau uses slightly different industrial classification codes to describe and measure U.S. industrial output. In order to perform Canadian and U.S. comparisons, a concordance table must be constructed to map Canadian industries to U.S. industries. While it is not possible to provide a perfect concordance, significant efforts were made to map Canadian and U.S. industries to the most appropriate and detailed 4-digit industry level. Unfortunately a few U.S. industries are formally associated with two or more distinct Canadian industries. To reduce double counting and provide the most reasonable comparisons, Industry Canada reviewed each of these problematic U.S. industries and assigned them to the single most comparable Canadian industry.
in the case of Canada’s Machine Shop Industry (3081) Industry Canada has associated it with the U.S. industries described to the right. Total shipments for each of these industries are also included in order to provide the reader with a sense of the relative contribution of each of the U.S. industries concorded to this Canadian 4-digit industry. To assist readers, we have placed an asterisk next to those U.S. industries, which could have been assigned to two or more distinct Canadian SICs. While we have used our own judgment in determining the most appropriate Canadian SIC, these U.S. industries have been flagged to alert the reader as to their existence and potential significance.
Trade
U.S. 5-Digit Industries Concorded to SIC 3081 – Machine Shop Industry Source: U.S. Department of Commerce. Graph.
Data Background
This section analyzes industry trade trends over the period from 1992 to 1996. It should be noted however that there is a fundamental difference between trade and production data. Production data captures secondary production, which occurs at the establishment level and differs from the plant’s principle manufacturing activity to which they are classified.
Trade data, on the other hand, classifies all products as they cross the border regardless of the principle activity of the producing establishment. This data is captured as a commodity rather than as an industry good. In an effort to quantify industry trade, Statistics Canada associates the exported commodity code (Harmonized System, HS) with a manufacturing industry code (Standard Industrial Classification, SIC) (see concordance, Cat. no. 65-202). A simple example would be the case of an exported automobile engine which would be attributed to the Canadian Motor Vehicle Engine and Engine Parts Industry even though it may have been produced by a plant classified within the Motor Vehicle Industry.
U.S. and Canadian export data include goods that have been grown, extracted or manufactured, including goods of foreign origin which have been materially transformed in Canada or the U.S. It does not include “re-exports” which are exports of foreign goods which have not been materially transformed in Canada or the U.S., including foreign goods withdrawn for export from bonded customs warehouses.
Canada/United States Overview
As shown below, in 1996, Canada’s Machine Shop Industry ran a trade balance of $[no data available for this year] million. This balance is from the 1995 level of $[no data available for this year] million. Over the 1990 to 1996 period, Canada’s trade balance in this industry had a compounded average annual growth rate (CAAGR) of [no data available]%. The U.S. ran a trade deficit of $3648.8 million in 1996, and their trade balance had a CAAGR of 15.4% since 1992.
Canada – Trade Balance
Canadian domestic exports totaled $0 million in 1996. Over the 1990 to 1996 period, domestic exports in this industry had a CAAGR of [no data available]%. In the U.S., domestic exports in this industry had a CAAGR of 13% over the same period.
In 1996, Canada’s total imports were $[no data available for this year] million, which represented a balance of [no data available]% from the 1995 level of $[no data available for this year] million. Over the 1990 to 1996 period, total Canadian imports of Machine Shop Industry had a CAAGR of [no data available]%, while in the U.S., imports had at a CAAGR of 13%.
In 1996, the Machine Shop Industry accounted for approximately [no data available]% of total domestic exports activity in the manufacturing sector. The same industry in the U.S. accounted for 4.3% of domestic export activity within the entire manufacturing sector.
Presented below, as a possible proxy or indicator of comparative advantage is an U.S. and Canadian comparison of “export intensity”. Export intensity is measured as a ratio of domestic exports to total shipments.
Canada – Export Intensity
The Canadian industry received [no data available]% of its rev