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Canada is a country open to foreign trade, which represents 60% of its GDP (World Bank, 2020). Product-wise, Canada’s main exports are petroleum products (12.3%), motor cars and other vehicles (8.2%), gold (4.1%), and auto parts (2.3%). The country imports mainly vehicles (8.4%), auto parts or accessories (3.6%), automatic data processing machines and telephones (2.4% each - Comtrade).
The main destinations for Canada’s exports in 2020 were the U.S. (by far the leading partner, accounting for 73.3% of total exports), China (4.8%), the United Kingdom (3.8%), and Japan (2.4%). Similarly, almost half of Canada’s imports had a U.S. origin (48.8%), followed by China (14.1%), Mexico (5.5%), Germany (3.2%) and Japan (2.5% - Comtrade).
Canadian trade was weak in 2020: according to data by WTO, exports of goods amounted to USD 390.6 billion, down by 12.5% from the previous year. Imports – at USD 414.1 billion - followed a similar trend (-10.7%). Concerning commercial services, Canada is also a net importer, with imports standing at USD 90.1 billion versus USD 84.4 billion in exports. The country’s trade deficit widened in recent years, attributable to exports in goods lagging imports in goods, partly due to the low prices of hydrocarbons and to the trade tensions with its main business partner, the USA. Meanwhile, the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union entered into force provisionally (it will take full effect once all EU Member States have formally ratified it) eliminating 98% of the tariffs, whereas the USMCA (Canada-United States-Mexico Agreement, an updated version of NAFTA) entered into force and is expected to further boost trade among the participating countries. The World Bank estimated the country’s trade deficit at 2% of GDP in 2020. According to the latest governmental figures, Canadian exports advanced 18.7% in the first half of 2021 (y-o-y), as higher exports of resource products were partially offset by lower exports of motor vehicles and parts and aircraft and other transportation equipment. Commercial services is the only component of services trade that is now well above pre-pandemic levels, whereas transportation and travel have not yet begun their recovery. In the same period, total services exports were 19.3% below the pre-pandemic level in Q4 2019, and total services imports were 30.6% lower.
Foreign Trade Values | 2016 | 2017 | 2018 | 2019 | 2020 |
---|---|---|---|---|---|
Imports of Goods (million USD) | 416,602 | 443,169 | 470,466 | 463,786 | 414,165 |
Exports of Goods (million USD) | 390,117 | 420,784 | 450,743 | 446,585 | 390,599 |
Imports of Services (million USD) | 97,378 | 106,885 | 119,605 | 120,043 | 90,175 |
Exports of Services (million USD) | 80,927 | 86,776 | 102,243 | 103,698 | 84,434 |
Source: World Trade Organisation (WTO) ; Latest available data
Foreign Trade Indicators | 2016 | 2017 | 2018 | 2019 | 2020 |
---|---|---|---|---|---|
Foreign Trade (in % of GDP) | 65.4 | 65.1 | 66.6 | 65.4 | 60.0 |
Trade Balance (million USD) | -19,170 | -19,083 | -15,327 | -11,576 | -27,321 |
Trade Balance (Including Service) (million USD) | -36,242 | -36,238 | -32,664 | -27,771 | -32,976 |
Imports of Goods and Services (Annual % Change) | 0.1 | 4.6 | 3.4 | 0.4 | -11.2 |
Exports of Goods and Services (Annual % Change) | 1.4 | 1.4 | 3.7 | 1.3 | -10.0 |
Imports of Goods and Services (in % of GDP) | 33.9 | 33.6 | 34.2 | 33.5 | 31.0 |
Exports of Goods and Services (in % of GDP) | 31.5 | 31.5 | 32.3 | 31.9 | 29.0 |
Source: World Bank ; Latest available data
Foreign Trade Forecasts | 2021 | 2022 (e) | 2023 (e) | 2024 (e) | 2025 (e) |
---|---|---|---|---|---|
Volume of exports of goods and services (Annual % change) | 5.0 | 8.4 | 1.1 | 2.5 | 1.9 |
Volume of imports of goods and services (Annual % change) | 12.7 | 10.3 | 1.1 | 3.2 | 2.1 |
Source: IMF, World Economic Outlook ; Latest available data
Note: (e) Estimated Data
Main Customers (% of Exports) |
2020 |
---|---|
United States | 73.3% |
China | 4.8% |
United Kingdom | 3.8% |
Japan | 2.4% |
Mexico | 1.2% |
See More Countries | 14.5% |
Main Suppliers (% of Imports) |
2020 |
---|---|
United States | 48.8% |
China | 14.1% |
Mexico | 5.5% |
Germany | 3.2% |
Japan | 2.5% |
See More Countries | 25.9% |
Source: Comtrade, last available data
Source: Comtrade, last available data
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88.1 bn USD of services exported in 2018 | |
---|---|
31.29% | |
Miscellaneous business,...Miscellaneous business, professional, and technical services | 25.37% |
Research and developmentResearch and development | 5.92% |
24.97% | |
Personal travelPersonal travel | 21.94% |
Business travelBusiness travel | 3.03% |
14.30% | |
Air transportAir transport | 7.35% |
Sea transportSea transport | 3.30% |
10.05% | |
5.92% | |
5.49% | |
3.08% | |
1.90% | |
1.40% | |
1.33% | |
Postal and courier servicesPostal and courier services | 1.33% |
0.26% |
110.6 bn USD of services imported in 2018 | |
---|---|
30.31% | |
Personal travelPersonal travel | 26.52% |
Business travelBusiness travel | 3.79% |
21.13% | |
Sea transportSea transport | 10.08% |
Air transportAir transport | 8.87% |
18.38% | |
Miscellaneous business,...Miscellaneous business, professional, and technical services | 17.25% |
Research and developmentResearch and development | 1.12% |
10.68% | |
6.95% | |
4.35% | |
3.76% | |
2.42% | |
0.93% | |
0.89% | |
Postal and courier servicesPostal and courier services | 0.89% |
0.20% |
Source: United Nations Statistics Division, Latest Available Data
Monetary Indicators | 2016 | 2017 | 2018 | 2019 | 2020 |
---|---|---|---|---|---|
American Dollar (USD) - Average Annual Exchange Rate For 1 CAD | 0.75 | 0.77 | 0.77 | 0.77 | 0.75 |
Source: World Bank - Latest available data.
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Canada uses supply management systems - which involve production quotas, producer marketing boards to regulate price and supply, and border protection achieved through tariff-rate quotas (TRQs) - to regulate its dairy, chicken, turkey and egg industries. Alcoholic beverages are subject to interprovincial shipping restrictions, and are regulated differently in each province, for example through sales quotas, requirements for in-province agents and specific labelling. The Canadian Radio-television and Telecommunications Commission (CRTC) imposes quotas that determine both the minimum Canadian programming expenditure (CPE) and the minimum amount of Canadian programming that licensed Canadian broadcasters must carry (Exhibition Quota).
Some goods are prohibited, especially importing second hand motorised vehicles, except for vehicles coming from the USA (the rules are becoming more flexible for Mexico), as well as weapons, munitions, nuclear materials and goods of a similar nature. Health Canada restricts the marketing of breakfast cereals and other products, such as orange juice, that are fortified with vitamins and/or minerals at certain levels. Processed Products Regulations prescribe standard container sizes for a wide range of processed fruit and vegetable products.
The rules of origin allowing reduction of duties, especially for textiles, have been draconian since the agreements within the CUSMA. These rules are considerably favourable to products which have proof of their origin in the USA.
Moreover, Canada is one of the biggest users of anti-dumping measures, with more than 85 products concerned (SIMA, Special Import Measures Act). These measures affect 35 countries or Customs areas (including the EU, for example). More than 50% of the products concerned are metallurgical.
For further information about import regulations and procedures in Canada, please consult the article Importing Goods into Canada produced by the Canada Border Services Agency.
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Latest Update: June 2022