Electrical Appliances Industry | The Canadian Encyclopedia


Electrical Appliances Industry

The dominant activity of the electrical appliance industry in Canada is the design, manufacture and sale of major household appliances. The core products (ie, those with very high saturation levels, approaching the category of necessities) are refrigerators, ranges, automatic washers and dryers.

Electrical Appliances Industry

The dominant activity of the electrical appliance industry in Canada is the design, manufacture and sale of major household appliances. The core products (ie, those with very high saturation levels, approaching the category of necessities) are refrigerators, ranges, automatic washers and dryers. Other major appliances include dishwashers, freezers, microwave ovens and room air conditioners. Manufacturing takes place entirely in Ontario and Québec.

History in Canada

To many Canadians in the 1920s, 1930s and 1940s, the purchase of a major appliance such as a washing machine was a major expenditure. There were some Canadian appliance manufacturers, eg, Beatty headquartered in Fergus, Ontario, and these had a reputation built on the reliability and service facilities relative to washing machines. The modern major appliance industry, however, has its roots in the American consumer-products boom of the 1950s.

By that time most major appliance products originated in the US and initially reached Canada as imports. Brands such as Kelvinator, Frigidaire, Philco, General Electric (GE) and Westinghouse became household words in Canada. Because of high Canadian import tariffs, most US manufacturers found it more economical to produce major appliances in Canada once the Canadian sales volume had climbed to permit reasonable economies of scale. The result was an industry dominated by high levels of foreign ownership, although the tariffs permitted a number of Canadian entrepreneurs to operate profitably as small regional manufacturers.

Among the most successful Canadian entrepreneurs were W.C. Wood and Ralph Barford, both of whom developed major appliance companies that have survived the ups and downs of the industry and the recession of the early 1980s. Wood survived by specializing in a single product (freezers) and exporting to the US.

By 1984 Wood was the largest and most modern freezer manufacturer in Canada. Mainly by acquiring existing small businesses (eg, McClary, Easy, Moffat), Barford put together the only Canadian-owned, full-line appliance company (GSW Inc). The Moffat acquisition, probably Barford's largest, brought GSW into the big 6 full-line appliance makers. The other 5, all foreign controlled, were Admiral, GE, Inglis, White and Westinghouse.

As early as the mid-1970s, the federal government had begun to urge the industry to consolidate to achieve greater economies of scale and become more competitive. An opportunity for consolidation arose in 1975 when White agreed to purchase the major appliance division of Westinghouse in the US. The Canadian assets were contingently part of the agreement; however, Canada's FOREIGN INVESTMENT REVIEW AGENCY intervened to block the sale in Canada. If it had gone through, White-Westinghouse would have had the scale potential to put pressure on the other 4 full-line competitors, particularly GSW.

Barford, in an attempt to protect GSW's position, negotiated a merger with Canadian General Electric (CGE), each firm contributing its major appliance activities to a joint venture called Camco. Camco then proceeded to purchase the Canadian major appliance division of Westinghouse, and because GSW held 50% of the voting shares of Camco, the purchase was exempted from FIRA procedures. By 1976 there were only 4 full-line competitors: Admiral, Camco, Inglis and White. The number was reduced to 3 in 1982 when Inglis, with some government assistance, bought out ailing Admiral.

The Modern Industry in Canada

Since import tariffs were scheduled to drop in the early 1980s to 12.5% by 1987, industry participants realized that more INDUSTRIAL RESEARCH AND DEVELOPMENT would be needed for the industry to prosper under international competition. By 1984 the US could not ship core products to Canada below Canadian costs, and under the FREE TRADE agreement US core products will still have difficulty penetrating the Canadian market with its 75¢ dollar. However, it is more likely that some agreed specialization in Canadian and US markets will capture greater scale economies in Canada. In 1986 exports of refrigerators and freezers reached 143 847 units, valued at almost $40 million, following an upward trend since 1984.

International trade in newer products was governed less by cost than by innovation. Products such as dishwashers and microwaves were imported because the design and development were done abroad. They were manufactured in Canada only when the sales volume was high enough to make it economical. Industry sources estimated in 1986 that Canadian production costs were 15-20% higher than US costs in core products and 30-40% higher in new products, assuming parity between the Canadian and US dollars.

All of the full-line manufacturers, based in Ontario and Québec, were affected by changes in the retail trade. Camco, 51% owned by CGE, competes largely through the Hotpoint, GE and Moffat brand names, and manufactured part of the Beaumark line for the Bay and Simpsons. Inglis, 43% owned by Whirlpool, competed with the Admiral, Inglis and Whirlpool names and manufactured the Kenmore line for Sears. White, almost wholly owned by Electrolux of Sweden, competed with the White-Westinghouse, Kelvinator and Frigidaire names and manufactured much of the Viking line for Eaton's and certain models in the Beaumark line.

Economic Performance

Although industry exports had increased and imports declined (largely because of weakness in the Canada dollar), a trade deficit in major appliances still prevailed in 1982, which was the worst year the industry had faced in over a decade as sales declined by 20%. A recovery began in 1983 and continued at a somewhat slower pace in 1984. Microwave ovens represent the only bright spot in the industry. Sales of microwaves have climbed steadily since 1976, when 65 000 units were sold, to 1986, when sales reached 1 075 000 units.

Unit sales of appliances as a whole, however, had been in decline since 1978. The decline was caused by high saturation levels of core products and low replacement buying. For example, the same proportion of Canadian households (over 99%) owned a refrigerator in 1986 as in 1976. Saturation levels for electric ranges (93%) and automatic washers (76%) had not grown either. Clothes dryers had grown modestly from 55% in 1976 to 69% in 1986.

Beyond the core products, saturation levels varied. Freezers reached 58% in 1986, but room air conditioners had reached only 18%. With the newer products, Canadian saturation levels were still catching up with those in the US. Dishwashers reached 26% in Canada in 1979, compared to 43% in the US. By 1986 the Canadian figure was 38%. A similar pattern arose with microwaves: in 1982 US saturation was around 27%; Japanese, 31%; and Canadian, 10%. By 1986 the Canadian figure had reached 44% and US ownership of microwaves was about 60%.


The Canadian work force in the industry is represented by several unions, including the United Electrical Workers (UEW). Employment in the industry has declined from 11 888 in 1976 to 6902 in 1981, partly because of reduced output but largely as a result of improved efficiency. Canadian wage rates in the major-appliance industry, on average, were higher than those in the US in the mid-1970s, but the relative decline in the Canadian dollar had reversed this situation by the early 1980s.

By 1984 both countries were facing strong competition from manufacturers in the Far East and Latin America in low-cost component parts. The industry is represented by the Canadian Appliance Manufacturers Association which, in turn, is a section of the Electrical and Electronic Manufacturers Association of Canada, with head offices in Toronto.