Skip to main content

Canada’s declining merchandise trade deficit


In October 2010, Canada recorded a merchandise trade deficit of $1.5 billion, by November this has shrunk to $81 million.  Imports declined by 3.2% (most of this volume, ¼ of the decline was price), with the single largest contribution being energy which dipped 15.1% (Strange – more on that later).  Import volumes fell 2.4% and prices down 0.8%, decreased for a fourth consecutive month.  Energy products and machinery and equipment were the main factors behind the decrease in the value of imports. On the other side of the equation, exports rose by 0.8%


The big picture items:
  • Canada’s trade surplus with the U.S. nearly doubled from $1.7 to $3 billion – mainly because of a drop off in Canadian vehicle imports from the U.S. (11.5% decline).  Vehicle exports have been trending down since may 2010, falling a further 10% in Novermber.
  • Canada’s trade deficit with the rest of the world shrank marginally to $3.1 billion
  • Energy imports dropped by 15% and export of crude rose by 12.5% (Nat Gas down 17%).  The drop in import may have to do with a shift in the composition of the energy complex.
  • Price of exported industrial goods and materials increased by 3.9%, which was a leading factor in the overall export picture.
  • Canadian companies retooling programs seems to be at an end with a 3.3% decline in volume of imports of tools and machinery by Canadian companies.  The biggest decline was for wind turbines which fell by 26


The image of Canada’s trade balance is not entirely expected; November marked one of the largest increase in industrial employment.  The shift in demand for vehicle (in light of $90+ oil prices) away from light trucks to automobile has a big impact on the vehicle balance of trade (light trucks are mostly manufactured in the U.S. while Canada focuses on cars).  It is difficult to make any generalization as to Canada’s trade balance based on a single month of data.  However, it is evident that a balance between goods imports and exports has been re-established (for how long?).  Canada’s core strength are raw material (grain, energy and materials) and the price (and demand) for these goods have exploded over the past 24 months.

Popular posts from this blog

Ok so I lied...a little (revised)

When we began looking at farming in 2013/14 as something we both wanted to do as a "second career" we invested time and money to understand what sector of farming was profitable.  A few things emerged, First, high-quality, source-proven, organic farm products consistently have much higher profit margins.  Secondly, transformation accounted for nearly 80% of total profits, and production and distribution accounted for 20% of profits: Farmers and retailers have low profit margins and the middle bits make all the money. A profitable farm operation needs to be involved in the transformation of its produce.  The low-hanging fruits: cheese and butter.  Milk, generates a profit margin of 5% to 8%, depending on milk quality.  Transformed into cheese and butter, and the profit margin rises to 40% (Taking into account all costs).  Second:  20% of a steer carcass is ground beef quality.  The price is low, because (a) a high percentage of the carcass, and (b)...
Post a Comment
Read more

Spray painting Taylor Swift G650 aircraft (updated)

 First, a bit of paint will not harm anyone.  These climate activities are going to learn two things in the next few days:  (1) Trespassing at an airport is a felony almost anywhere in the world.  That means criminal prosecution.   (2) removing paint from an aircraft is expensive.   So these climate activists are about to find out the reach of the British criminal system and it will not be pleasant, the UK has very strict laws about that, I would be surprised if cleaning the aircraft of all the paint will cost less than $100,000.     I am sure that when they planned (premeditation) this little show they had a very valid logic to doing this.  Tonight, they are probably realizing the depth of their troubles.   I understand that in the UK it's a minimum one-year jail sentence.    Also, good luck travelling with a criminal trespass charge against you.  I am relatively certain that the airline industry will ...
Post a Comment
Read more

Janet Yellen from China supporter to Hawk...

There is rarely serious news in the world these days, it seems that most newspapers are filled with headlines and little else, and then Ms Yellen went to China.  Secretary Yellen has long been known in the Biden administration as the voice of moderation when dealing with China, yet as her trip which concluded yesterday a hawk was born:  She warned the Chinese against dumping goods in the United States.    fighting words! The American administration is very concerned about the lack of Chinese domestic consumption.   Even before the COVID-19 epidemic, there were already the beginning signs of a slowdown, automobile sales were off.   China is facing domestic deflation (a clear sign of collapsing demand) China imports few consumer goods, they import raw materials and intermediary goods.   It seems that the American administration is concerned that the Chinese administration will dump consumer goods abroad to keep its manufacturing machinery ...
Post a Comment
Read more