Otto Schmidt, a young and highly skilled German engineer, immigrated to Canada in 1929 and was quickly hired by Northern Electric as a toolmaker and tool designer.

In 1943, he founded Canadian Tool Engineering Co., which has now supplied tools and toolmaking services to the North American cable and plastics industries for six decades. In 1963, the shop moved from its original location in downtown Montreal to a new building in Montreal North. A federal charter was granted to the company as Canadian Tool Engineering Ltd. in 1978.

After serving three years in the Air Force, Fred Schmidt, Otto's son, joined the firm as an apprentice toolmaker in 1959. Fred learned the toolmaking trade under his father's expert supervision. By 1969, Fred had become a master toolmaker and was also the business manager for the company. Otto was still enjoying twelve-hour workdays in the shop right up until his passing that year at the age of 76.

Fred remains as a consultant to Canadian Tool, but he transferred control of the majority of the business to his son Ken in 1997. Ken Schmidt, Ph.D. (Chemistry), is now president Canadian Tool (9055-1425 Quebec Inc.), a Quebec charter.