Canada has had a long and chequered experience in dealing with the question of world product mandates (WPMs). Prior to the Second World War, many US owned firms were established in Canada’s manufacturing sector with exclusive mandates to take advantage of the country’s privileged export market access to Britain, the West Indies, South Africa, Australia, New Zealand and India under Imperial tariff preferences. Despite the positive opportunities afforded by improved terms of market access abroad, the Canadian manufacturing sector appeared more preoccupied with maintaining a strong domestic base as a prerequisite to penetrating foreign markets. The first negative externality is the cost to the public treasury. A second major constraint to embracing the WPM option is the coercive tools that may be deployed. The Progressive Conservative Party of Canada, which was elected to office in September 1984, has changed the business climate under which WPMs can be encouraged in Canada.