In the past several years, a Royal Commission has reported on the automotive industry and a number of changes have been made in tariffs on automobiles and parts. Although the changes of late 1962 and late 1963 differed in detail from the recommendations of Dean Bladen in his Royal Commission report, they introduced in an alternative form the major innovation recommended by the report, namely, export incentives. By encouraging exports, and particularly exports of parts, the government hoped to stimulate Canadian employment, improve the current account balance, and contribute to the efficiency of the Canadian industry by making possible longer production runs.
Issues of great complexity were introduced by both the Bladen recommendations and the recent changes. Evaluation of their probable effects is made doubly difficult because of the previously existing system of import duties compounded with Canadian content requirements. Nevertheless, it is important that a detailed study be made of recent innovations, particularly as the three-year limit on the changes of late 1963 has made it clear that there will be a major review of policy in the near future. American objections to the innovations, and the possibility of retaliation, have further increased the importance of an evaluation.