This paper examines the extent to which Japanese and U. S. subsidiaries in Canada are contributing in terms of employment and value−added to the Canadian economy, respectively. As for the U. S. subsidiaries, they contribute much to the Canadian economy and more than 10% of both in employment and GDP in Canada is accounted for by the U. S. subsidiaries and this ratio tends to rise after the settlement of NAFTA which means to
strengthen the relationships between two countries. In contrast, Japanese subsidiaries are not contributing to Canada directly not so much as the U. S. counterparts and rather they are only minor players. However, Japanese subsidiaries can play a major role indirectly (for example. technology transfer, management method and workplace discipline) in helping Canadian manufacturing,which has been thought as a weak industry for a long time.