Thank you to the honourable member for dating himself.
When I was a kid, there were big cars here. The big cars were American and the smaller cars were Japanese. The Japanese took proper, full advantage of a hole in the market for what we needed, especially with the spike in the price of fuel.
We use the Japanese or the Europeans. They develop vehicle size and fuel standards in part because of the cost of fuel. It's also in part because of the size of the roads in those markets. In Europe there's a displacement charge that starts at two litres of displacement. If you go to Europe for whatever reason and you rent a car, you'll notice that almost everything starts as two litres or under. Everything else is a luxury tax that gets borne by the owner every year.
I won't tread over the criticism that we should make things that are more attractive to the Europeans and the Japanese. I don't know if I agree or disagree. Those are certainly arguments that have been made over the years. Those products are made that way because of the way the roads are and the price of fuel. The reason we have bigger cars here is that we have cheaper fuel and bigger roads.
What I'm merely saying is that the position of our organization, certainly for domestic producers here, is to be awake to that when you make trade negotiations and say, “Oh, well, we have access to the European market” or “We have access to the Japanese market.” That's despite the fact that a lot of what's happening in the automotive sector is on global platforms that are designed to more homogeneous customer preferences.
The reality of what their production is geared towards is that the Japanese have a market of five million vehicles a year, but they make nine million. They need to export. In Canada we make two million cars a year and we buy two million cars a year. It's a balance. They got the better deal in TPP. We didn't make a free trade arrangement with CETA. There's a quota there. Certainly I would have been saying the same thing if we had conceded local content requirements in exchange for the reduction of, or at least the addressing of, non-tariff barriers.
We don't make decisions in Toronto, Ottawa, Calgary, Montreal or Vancouver on what those cars look like. In this country, we supply those decisions as made by Detroit, Tokyo and now, increasingly, the Germans. Canadian interests don't control the design, engineering and size of vehicles, and Japanese interests do. They have a much stronger hand. The Europeans have a much stronger hand. The Koreans have a much stronger hand.
In the trade agreements we made with each of those regions, we lowered the domestic content requirement to sell a car tariff-free and we did not address the barriers to entry. It wasn't the death knell in any way for the Canadian market, but it did concede a whole bunch of market space to imports. Now we have EV mandates that are proposed, and certainly will be confirmed this year, that require a certain percentage of domestic sales in Canada to be EVs; otherwise, those companies will face a $20,000 fine for each vehicle that is not compliant. Well, a lot of those companies are in TPP or CETA countries that will meet those targets by importing vehicles to sell to Canadians because it's easier and more profitable than to do a short production run here and have Canadians build them and have Canadians supply parts to them.
We need to be careful. At least we need to be informed—