The standard explanations are that the high tariffs of the Canadian National Policy (1879-1930) induced US corporations to jump over them and set up branch plants in Canada, that proximity to the United States which was a pioneer in foreign direct investment abroad overwhelmed domestic industrialists, and that the …
Why is Canada a branch plant economy?
Manufacturing companies set up branch plants to serve the Canadian market, thereby avoiding high freight costs and import duties. US-owned branch plants also benefited from the fact that products made in Canada were admitted at preferential tariff rates to other British Empire countries.
What is the purpose of branch plant economy?
The branch plant economy is the phenomenon of United States companies building factories in Canada, primarily to sell products in the Canadian market. In the period between the American Civil War and World War I, U.S. companies began to look to Canada as a new market.
In what sense could Canada’s economic system be described as a branch plant economy?
In general, “the term branch plant economy refers to a convenient shorthand term to describe a regional economy where a large proportion of the employees are in establishments owned by firms whose head office lies outside the region” (Watts 1).
What is branch plant industrialization?
Branch Plant Industrialization. movement to places that were at one time industrialized but have seen a down-turn so that they can be used for low-paid highly-skilled labor.
Is Canada a branch plant economy?
The Canadian auto industry typifies the modern idea of the branch plant economy. The term really grew legs in the 1960s and 1970s during a rise in Canadian economic nationalism, and fears that our country was becoming a U.S. Protectorate as a cause célèbre during Trudeaumania.
What is a branch plant geography?
a plant or factory in Canada belonging to a company whose headquarters are in another country.
Why Canada’s close economic ties to the US contributed to the depression?
In 1930, the US enacted the Tariff Act of 1930 — the Smoot-Hawley Tariff — which took US tariffs to record levels, not only dealing an immediate and devastating blow to the Canadian economy but precipitating competitive rounds of protectionism worldwide, making the Great Depression much worse.
Why was international trade so important to Canada?
Exports allow Canadians to sell their goods and services in exchange for foreign goods and services. They also help to support jobs in Canada, directly to those producing the goods and services, and indirectly to those providing supporting activities to the producers of Canadian exports.
Does Canada have a strong manufacturing industry sector but a weak primary sector?
Notwithstanding the global turndown in commodities, Canada’s strength remains primary industries, as secondary manufacturing as a proportion of GDP has shrunk since the 1970s. Overall, the growth in the service economy has increased significantly, and is the largest segment of economic output.
Who were the main investors in Canada’s economic development?
Investors from the United Kingdom and the United States helped fuel the country’s economic growth (from a postcard sent in 1907).
What is branch in plant?
of a tree a part of a tree that grows out from the trunk (=main stem) and that has leaves, fruit, or smaller branches growing from it → limb After the storm, the ground was littered with twigs and branches.
What impact have foreign multinationals had on the Canadian economy give some examples?
Foreign multinationals make valuable contributions to the Canadian economy. Their plants not only have higher productivity, they tend to be more capital intensive, pay higher wages, and hire more white-collar workers than their domestic competitors.