Toronto, Ontario – Canada’s automotive trade deficit more than doubled last year, to almost $14 billion, according to the Canadian Auto Workers Union (CAW). The 2007 deficit was $6.6 billion.
The union said the 2008 deficit marked the country’s worst-ever year in international trade in automotive products.
According to data released from Statistics Canada, the country’s exports of finished vehicles declined by almost one-quarter, as a result of the financial crisis and the collapse of U.S. auto sales. Imports of auto parts, used in Canadian auto factories, also declined. However, the union said that imports of finished vehicles from offshore grew again, for the fifth straight year, despite the economic crisis.
For the first time in decades, Canada experienced a net auto trade deficit within North America, with its traditional auto surplus with the U.S. plunging to just $4 billion, barely one-fifth the level of three years ago. The surplus no longer offsets Canada’s long-standing auto trade deficit with Mexico, which equalled $4.5 billion in 2008, leaving a small combined deficit for the NAFTA region as a whole.
Canada’s automotive exports to countries outside of NAFTA plunged 30 per cent in 2008, to just over $1 billion, but auto imports outside of NAFTA continued their steady growth, reaching a record $15 billion. The CAW said that for every dollar of automotive imports that Canada accepts from outside of NAFTA, it exports only seven cents back in the other direction.
“This data confirms that Canada’s unbalanced trade with Asia and Europe is a major cause of the industrial carnage we see around us today,” said CAW president Ken Lewenza. “For years we tolerated a growing offshore imbalance, because our strong position in the U.S. market bailed us out. But clearly we can’t count on the U.S. market to prop up our trade numbers anymore, which makes it all the more essential to address those trade imbalances with the rest of the world.”