The latest statistics confirmed that 2020 was an unprecedented year for Canadian exports, with the pandemic and following disruptions pushing trade figures dramatically lower almost across the board.
The Daily report released by Statistics Canada this week said Canadian merchandise exports fell 12.4% last year to $524 billion. The drop meant the trade deficit for merchandise more than doubled from $15.4 billion in 2019 to $37.3 billion last year. Worse, when services trade was taken into account, the Canadian deficit grew to $44.8 billion.
While Statistics Canada noted the effect of a number of events in late 2019 – closure of an Ontario car assembly plant, a pipeline rupture in North Dakota, the rail blockades and global trade tensions – the COVID-19 pandemic remained the dominant explanation for the lower trade numbers.
“With the shutdown of several industries in Canada during the first wave of the pandemic in March, April and May, both exports and imports of goods and services fell to historic lows,” the report said, although it did note that many industries then saw a rebound as consumer demand picked up while supply chains restarted.
To illustrate the phenomenon, the report included data that showed Canadian exports falling 28.4% - or $12.6 billion - last April to $31.7 billion, the lowest such monthly figure has reached since 2009. By July, however, exports rebounded to $46 billion, just $1.9 billion shy of the figure reported in the last pre-COVID month of February.
There are a few outliers from the main trend of a massive dip in April followed by steady recovery starting in June or July. Farm, fish and food products exports, for example, never dipped for the entirety of 2020, surging 14.9% to reach a record $43.6 billion for the year. And while higher prices did contribute to the gain, Statistics Canada said the export growth was mainly driven by increased trade volume – highlighted by exports of canola, wheat, peas, lentils and soybeans.
Ironically, despite geopolitical tensions with China, about a third of Canada’s food export gains in 2020 came from higher exports to the world’s second-largest economy. Farm, fish and food exports to China spiked 38% last year. However, officials note the export figure to China in 2020 is still 23.1% behind record numbers posted in 2018 – before Beijing began targetting Canadian canola and soybeans with import bans due to tensions surrounding the Meng Wanzhou extradition hearings.
Mineral exports also rose in 2020 by 2.5% despite most ores seeing a decline. The growth was driven by global demand of gold, silver and platinum due to uncertainty in the financial markets.
The full report can be read at https://www150.statcan.gc.ca.
