Richard Nixon Played a Role in Launching Toyota in Canada

Long before Toyota became the Canadian powerhouse it is today, the automaker’s vehicles were being built in a corner of the country better known for coal mining than carmaking.

The empty lot where the facility once stood is absent of any kind of marker or commemorative plaque, but it’s significant nonetheless for being the first of its kind for Toyota — or any Japanese automaker, for that matter. That it’s nestled in what’s now known as the Cape Breton Regional Municipality (CBRM) in northeastern Nova Scotia only adds to the uniqueness of the automaker’s origins here.

But Toyota’s Canadian history actually began a handful of years before that plant near Sydney, N.S., started cranking out cars to the tune of 10 per day — a far cry from the more than 2,000 vehicles Toyota churns out daily from its trio of plants in Ontario. And it launched with the unwitting help of an unlikely source: Richard Nixon. Indeed, the former president of the United States was instrumental in getting the automaker’s Canadian operations off the ground, however unintentional it was.

Ahead of the Pact

It might be hard to imagine a Canadian auto industry without what’s today among its most prominent members, but 60 years ago, there simply was no Toyota in Canada. And even when it did come to be in 1964, it wasn’t Toyota itself operating on these shores but rather an independent distributor called Canadian Motor Industries Ltd. (CMI).

It wasn’t long after the company was established that its plans grew more ambitious, with aspirations of assembling cars on home soil announced in November 1964. And according to a Toyota executive, the rapid ramp-up was entirely by design.

“1964 was not an accident,” said Toyota Canada vice-president and corporate secretary Stephen Beatty, noting the timing of the incoming Automotive Products Trade Agreement of 1965 that was aimed at boosting the fortunes of the industry in Canada. Specifically, the auto pact, as it was known, applied to automakers operating in Canada prior to July 1964. Building cars in Canada — even so-called knock-down kits like the ones that were eventually assembled in Nova Scotia — would give brands like Toyota a tariff-free foothold to enter the American market.

But before any of that could happen, CMI started selling vehicles in Canada. And it was in 1965 that the first shipment of 217 Toyota Crown sedans arrived in Vancouver before making their way to a budding dealer network across the country, followed by the rough and rugged Land Cruiser. By the end of the year, 755 Toyotas were sold across Canada — a fraction of the nearly 225,000 vehicles the automaker sold here last year alone.

The Nixon Connection

Anyone hoping for some sort of Toyotagate scandal will surely be left disappointed, although the former president’s connection to Toyota in Canada is fascinating nonetheless. No, Tricky Dick wasn’t directly involved in the dealings, but his sphere of influence happened to unknowingly overlap with the interests of both Toyota and CMI.

As the story goes, the then-struggling — and long since defunct — Studebaker was still building cars in Hamilton, Ont., and looking for a lifeline when two rather fateful events occurred. The first was the failure of negotiations between CMI and Studebaker that would have seen the former take over the latter’s Canadian operations, reportedly with plans to build Isuzu Bellett sedans as rebadged Studebakers. But those talks broke down, according to Toyota’s Beatty, over financial liability concerns.

In the meantime, the head of Studebaker’s Canadian operations, Gordon Grundy, was in Japan negotiating with Nissan predecessor Datsun about building some of the brand’s affordable small cars in Canada when a piece of advice was passed along that changed the tides for Toyota, CMI, and Studebaker all at once, with the latter closing up shop shortly thereafter.

“I guess Studabaker was working with a law firm in the U.S. to try to package some kind of a deal, and a member of the firm was a guy by the name of Richard Nixon,” Beatty said.

Apparently, Nixon advised Grundy to also meet with Toyota while in Japan — ostensibly to bolster Studebaker’s negotiating position, or at the very least see what else was out there. Toyota’s executives turned their noses up at the idea of being second choice to rival Datsun, while that automaker’s leaders were offended by Grundy’s decision to meet with the competition and abandoned talks altogether. Suddenly, the runway was clear for the assembly of both the Isuzu Bellett and Toyota Corolla to land exclusively with CMI.

But Why Build Cars in Cape Breton?

It’s fair to wonder why CMI chose Cape Breton of all places as the home of the modest production plant that would go on to build the first-ever Japanese car to roll off a North American assembly line in 1968. After all, the move was unprecedented, with Volvo operating the closest automotive production plant some 400 km away in the Halifax area.

It would also make more sense — at least on the surface — for Isuzu and Toyota knock-down kits to be put together in British Columbia, considering the province’s proximity to Japan. But then that’s where another twist in the Toyota story occurs, with Canadian engineer and entrepreneur Peter Munk and his business partner, David Gilmour, entering the picture.

Significantly, both men were registered as directors of CMI and at the time running Clairtone Sound Corp., Ltd., which manufactured high-end home electronics including stereos and televisions. With those products made in Stellarton, N.S., with the backing of the provincial government’s Industrial Estates Limited (IEL) Crown corporation, the decision to operate the automotive assembly plant on leased land in Nova Scotia starts to make sense — at least from a business perspective.

After the Bellett, which was the first Japanese vehicle ever assembled in North America, came the Toyota Corolla in September 1969, marking the brand’s first vehicle to be built on the continent. Roughly 7,500 Corollas were assembled at the plant before it shuttered in 1975, but the little car’s legacy in Canada has endured over the decades that followed, including for being built over the course of more than 30 years at Toyota’s plant in Cambridge, Ont., from 1988 to 2019. (It was eventually replaced with more RAV4 production.)

Final Thoughts

The auto industry may not be cyclical in the same way as fashion, but it certainly feels like it at times. No, that doesn’t mean station wagons aren’t about to make a comeback, but as Toyota celebrates 60 years in Canada, two of its original nameplates have made their triumphant returns to these shores in time for this anniversary occasion.

Both the Land Cruiser and Crown Signia also happened to be part of a little commemorative caravan that arrived in the area where that first assembly facility stood, along with a Corolla sedan. (Don’t think for a second that any of this was a coincidence.) It’s just one point of interest on a whirlwind anniversary tour travelling from one end of the country to the other, and while it might not be the most exciting stop along the way, it could well be the most important.

Companies come and go, while others go through changes. And while there’s no doubt the Toyota Canada of today is drastically different from the distributor that came before it, these humble beginnings are part of a much larger story.

It tells of uniquely Canadian aspirations, as well as getting a leg up on the globalization of today’s auto industry. It’s impossible to predict exactly what the sector will look like in another 60 years, especially with all the questions around electrification, but then success was far from a certainty back in 1964. Whether it’s simply an interesting story or a sign of what’s to come has six decades to be decided.